All Media. James Murdoch, who was CEO of 21st Century Fox before his father sold out to Disney for $71.3bn, reportedly plans to invest $1bn (50% of his personal proceeds) in establishing his independent media business, Lupa Systems. It will act as a holding company for his investments, with offices initially in New York and Mumbai. He’s in business on his own again two decades after he owned a hip-hop music label.
His first investment is expected to be a $5m stake in the new comic book publisher Artists, Writers and Artisans (AWA), which plans to migrate its characters to movies and games, under the ex Marvel Comics COO. AWA distinguishes itself from comic-book rivals like DC and Marvel by guaranteeing creators a percentage of the licensing deals it strikes. AWA’s stable of writers already includes Garth Ennis, who created the “Preacher” franchise, and J. Michael Straczynski (“Babylon 5”) who has also written stories for Marvel’s “Amazing Spider Man”. So it’s already a bit more than a startup.
In the week when James Murdoch has publicly donated to the campaign funds of Pete Buttigieg, the youngest Democratic hopeful for the 2020 US Presidential race (emphasising his political distance from his father and from Fox News), he apparently wants to develop a liberal leaning media portfolio, including news and lifestyle digitals, and also short-form content and adtech.
He has long been out of step with his older brother Lachlan and his father, politically, environmentally and technologically. He’s mad about cycling, karate and Bill Clinton. Don’t mention Donald Trump. Even Rupert Murdoch’s initial willingness to contemplate the sale of 21st Century Fox (at least partly because he felt unable to compete in the new era of Netflix, Apple and Amazon) was at odds with James who had, for three years, been trying to persuade his father to let him launch a streaming competitor. In the end, of course, the Disney price swung it.
The European image of the UK-born, US-educated James Murdoch is still clouded by his feeble excuses in News Corp’s phone hacking scandals during 2010-14. His heart wasn’t in either the company’s shaky defence or his father’s cherished newspapers that had caused all the trouble. But James had been a huge success as CEO then Chair of Sky, Europe’s best pay TV network, which has been bought by Comcast for $39bn. He led the transformation of a very good UK business into an unrivalled European leader in subscribers, content and technology. Rupert’s “tech-to-his-fingertips” younger son is now itching to create businesses with the smarts of both Silicon Valley and Hollywood. That’s why investors and inventors are already pitching.
B2B. Flight International magazine will celebrate its 110th anniversary this year – with a new publisher. It is believed that the UK-based weekly and its sister Airline Business are in the process of being sold by Reed Business Information (RBI) for a price of £6-8m. They are estimated to have revenues of £8-10m and operating profit of £1-2m. The so-called Flight Group is being separated from RBI’s Cirium aviation analytics and consulting business which is being retained.
It is not believed that the successful bidder for the group is one of Flight International’s main competitors, Jane’s Information Group (owned by IHS Markit) and Aviation Week (Informa). The venerable magazine is one of RBI’s last remaining links with its pioneering predecessors as publishers of specialist magazines, especially with transport brands like Commercial Motor, Autocar, Motorship, and Railway Gazette. Flight International itself was founded by Stanley Spooner who had already given the world “The Automotor Journal & Horseless Vehicle” late in the nineteenth century. His diversification into coverage of the first aircraft led to the breakthrough launch in 1909.
RBI’s impending sale of Flight International (what an archive) leaves Farmers Weekly and Estates Gazette as the last remnants of a print legacy but, presumably, the separation of magazines from data services will apply also to those brands some time soon. The vanishing magazines actually highlight RBI’s brilliant transformation as the cornerstone of the £2bn-revenue data and analytics powerhouse of the £30bn RELX group.
Events. Connect Travel, of Atlanta (a subsidiary of the UK-listed Tarsus exhibitions group), is acquiring four ‘summit’ events and a publishing brand from North American Journeys Inc (NAJ). Three summits (East, West and Orlando), Active America China, as well as the Inbound Report and TourOperatorLand. com will join the Connect Travel portfolio, which includes some similar travel industry events. Last year it acquired the eTourism Summit from NAJ.
Tarsus, which has a market cap of £380m, gives all the signs of a group that aims to diversify further beyond events into business information. Alone among the major exhibitions groups, it self-describes as “an integrated media company” and “an international business-to-business media group with interests in exhibitions, conferences, education, publishing and online media”. The 21-year-old exhibition organiser took its first major step into business information back in 2000 when it acquired the US-based Trade Show News Network (TSNN). That now claims to be the most widely-used events database with some 130k registered web users.
The question of whether exhibitions can benefit from integration with information services in any given sector is a familiar one. It is, presumably, being asked again at Informa, now the world’s largest exhibition organiser which is also a substantial business information provider. It feels like part of a discussion about just how exhibitions might pre-empt the digital disruption that has wrecked the business models of almost every other media channel.
For all the long-term global growth in exhibitions revenue, profit and venues, the future of trade shows may depend on extending their use of databases into business intelligence and procurement services. Even if cash-rich exhibitions did nothing more than develop exclusive data and information as value-added services for existing customers in their own markets, there may be good reasons to buy and build broader B2B media. Not ‘content marketing’ or trade news but valuable data and even workflow systems that customers might otherwise have to buy. Perhaps that is what Tarsus (and others) are thinking about.
Sound +Vision. Vox Media, of the US, has acquired California-based Epic Magazine and Epic Digital, which were founded in 2013 by journalists Josh Davis and Joshuah Bearman to publish “high profile true stories”.
The company is developing 40 film and TV projects. Their series Little America will be streamed by Apple and further projects include one scripted by the Coen brothers and another about disgraced auto entrepreneur John DeLorean, to be directed by George Clooney.
This is the first entertainment acquisition for Vox Media, which operates seven sites including Vox, The Verge, Eater and SB Nation, and has almost 90m monthly uniques in the US. But the deal is significant also because it will diversify the revenues of the largely advertising-funded network which, like many of its digital news peers, missed its advertising revenue targets for 2018. Vox had been targeting revenue of about $200m, compared with $160m in 2017. But it may have achieved almost no growth. Investors must be getting nervous about the company which has raised more than $300m in funds: its last investment, from NBCUniversal, valued Vox at about $1bn.
For this and other advertising-dependant digitals with strong audiences and high-rated content, it may be a question of adjusting expectations and costs (Vox Media has some 1,000 employees) – and diversifying revenues.
That re-adjustment is going to be an increasingly familiar theme in 2019 and the new realities will surely produce some headlining mergers of new media with old. In addition to this week’s resurgent talks between Viacom and CBS, and speculation (yes) of an Apple-Disney streaming combination, can we expect Huffington Post, Vice, and BuzzFeed to be acquired by traditional news companies?
All media. The UK authorities have approved the acquisition of outdoor advertising business Exterion Media by Global, the country’s largest radio group. Global will now launch its Outdoor division which includes the simultaneous purchases of Primesight and Outdoor Plus last September and Exterion in November. The radio group is now one of the European leaders in outdoor advertising which, presumably, will spark new innovation in digital out-of-home media.
Events. Centaur Media, of the UK, continues its disposals with an agreement to sell for £5m Employee Benefits and associated activity, to the German-owned DVV Media International. Revenues are derived primarily from events and online. DVV Media International is a UK subsidiary of DVV Media GmbH, of Hamburg, which specialises in transport/logistics and HR professional information. Its UK and international brands include Railway Gazette International, Commercial Motor, Motor Transport and Personnel Today which were formerly published by Reed Business Information. In 2018, Centaur’s HR business made £1.2m EBITDA on revenues of £3.2m, producing a multiple of just over 4x times earnings. Centaur has so far achieved disposal proceeds of £19.25m.
Magazines. The Claverley Group, one of the lesser-known but consistently most successful medium-sized publishers of regional newspapers in the UK, has acquired a majority shareholding in Kennedy Enterprises, of Bristol, publisher of 25 children’s magazines and comics with annual copy sales of 3.5m. Claverley is the long-term family-owned publisher of the Express & Star and Shropshire Star in the English West Midlands and the Jersey Evening Post and Guernsey Press in the UK Channel Islands off France. It has revenues of some £75m.
Sound +Vision. US Telco AT&T has sold its 9.5% stake in video streaming company Hulu back to Hulu for $1.43bn, ending the companies’ joint venture. The deal valued Hulu, which is majority-owned by Disney, at $15bn. Hulu was established in 2006 as a JV to allow broadcasters to address the threat of streaming services and now boasts 25m subscribers, attracted by titles including Emmy-winning The Handmaid’s Tale. Disney recently announced its own plans to deliver branded TV content to consumers via Disney+, and Hulu will be part of this strategy.
B2B. The UK’s Centaur Media Plc has confirmed it is selling its Business Travel Show and The Meetings Show, to Northstar Travel Media, of the US, as forecast last month in Flashes & Flames. The deal, for £9.25m in cash, is expected to complete on 30 April. In 2018, the exhibitions made adjusted EBITDA of £1.7m (before central overhead allocations), up from £1.6m in 2017, on revenues of £6.4m (2017: £6.1m).
The deal follows last week’s sale by Centaur of its financial services portfolio to Metropolis Group, for £5m.
It is now believed that Centaur’s £3m-revenue engineering portfolio (comprising The Engineer and the associated Subcon exhibition) may be acquired by the Mark Allen Group (MAG), for some £2-3m. This would mark a further build-up in MAG’s engineering portfolio. In 2014, it acquired the 40-year-old engineering specialist Findlay Media whose brands included Eureka!, New Electronics, and Machinery. Just this week, it also announced the acquisition from UKi of some internationally-focused magazines in automotive and aviation (see the following item in MediaDeals).
If it acquires the Centaur engineering portfolio, MAG will have strong information and events in three main B2B groupings: Health, Education and Social Care; Engineering; and Music. Although its digital resources may still be under-developed, the company has become a strong exhibition organiser as well as a solidly profitable publisher of B2B magazines. Its 2017-18 revenue/ EBITDA was £43m/£7.2m (2016-17: £37.1m/£5.5m). Current year revenue is expected to be more than £50m, with about 40% from exhibitions (all acquired and launched in the last seven years). The story keeps getting better.
B2B. Britain’s acquisitive Mark Allen Group (MAG) is buying 12 predominantly international, controlled circulation (free) magazines from the 28-year-old UKi Media & Events for a price believed to be £5-6m. The B2B magazines are mainly in the aviation and automotive sectors and include: Business Airport International, Aircraft Interiors International, Business Jet International and Vehicle Technology International. They will now be managed alongside the MAG brands Ground Handling International, Ramp Equipment News, and Air Logistics International.
The acquired portfolio is estimated to have total revenues of some £5m and operating profit of about £1.5m. Twenty people will be transferring with the brands. While this latest bolt-on deal cements MAG’s reputation as the UK’s most active acquirer of B2B assets (especially in print), it serves to highlight the almost-secret rise of UKi as one of the country’s leading exhibitions organisers which primarily operates automotive trade shows in North America, Europe and Asia.
The cash-rich company was founded in 1991 by Tony Robinson as AutoIntermediates Ltd, before becoming UK & International Press. By 1997, it had moved into exhibitions. In 2000, it became UKIP and, only recently, rebranded as UKi after several years of being confused with the fringe political party of the same name. In 2017, the company made operating profit of £6.83m on revenue of £33.5m (almost doubled in 10 years), more than 50% of which was earned in Continental Europe, notably from the range of automotive testing, interiors, components, engines and interiors exhibitions it operates annually in Stuttgart, Germany. These shows have been successfully cloned, variously in North America, China, India and South Korea.
UKi employs some 150 people – little changed in the 10 years that operating profits have increased by 500%. It has been listed in ‘fast track league tables’ and its own proud reference to awards made more than 10 years ago contrasts with exhibition web sites that seldom list even the company’s own name. Tony Robinson, the all-action (motorsports and flying) founder-owner almost never gives interviews. In the past, he has said:“We have consistently put people on the phones to research worldwide communities of specialist engineering and technical people. We don’t believe in buying-in data. We want to research it and verify it for ourselves.” The company’s success has been all about organising highly technical exhibitions with great attention to the detail of providing on-site testing facilities, demonstrations and highly-rated conferences.
This brilliant specialisation in technical events across automotive, traffic, marine, and aviation has been clear from the way that some advertisers and exhibitors are said to spend up to 90% of their entire global marketing budget on Tony Robinson’s magazines and exhibitions. In that sense, this disposal of 12 magazines to Mark Allen is no big deal since most are ancillaries to the company’s exhibitions – including Aircraft Interiors whose accompanying show was sold 10 years ago to Reed Exhibitions for an estimated £1.5m.
At this stage, Robinson will be hanging on to all his exhibitions and also to a bunch of magazines (principally in automotive). You wonder, therefore, whether this week’s divestment is motivated by the soaring valuations of exhibition specialists everywhere. Could the deal be a prelude to a sale of the whole business, perhaps to one of the private equity firms which have coveted UKi over the years and are now all over the exhibitions market? The company is only slightly smaller than the similarly UK-based but global Mack Brooks for which Reed Exhibitions paid some £200m in January. What’s next?
Magazines. The £90m-revenue Hearst UK may be planning a “material acquisition in a complementary business” over the next 12 to 18 months as part of a shift to becoming a “premium content and experience business”, according to chief operating officer Claire Blunt. Speaking at last week’s Digital Media Strategies conference in London, she said: “We’ve started to talk this year about seeing ourselves as a premium content and experience business – and so I guess one has to conclude that our complementary business would be in the space of enabling us to be that.”
Blunt’s words sent brokers scurrying even though 12-18 months seems a long way off and the parent company may first be pressing for more economies in its London-based magazine portfolio. Or not. Perhaps we can expect to see Hearst acquire a UK content marketing company or even an exhibitions organiser. But should CEO James Wildman go for Ollie Lloyd’s Great British Chefs ? The inspired, privately-owned eight-year-old online recipe, publishing, food research and insights business (with revenues of perhaps £2m) could be a perfect fit for Hearst’s Good Housekeeping whose influential GH Institute operates a London cookery school and carries out tests on behalf of food and kitchen equipment manufacturers. Way to go.
Magazines. American Media Inc (AMI), of New York, will offload its tabloid weeklies including the racy The National Enquirer after becoming involved in politically-charged legal investigations. The key shareholder in American Media, the hedge fund Chatham Asset Management, is said to be pushing for the sale of The National Enquirer (US and UK editions), The Globe, The Star, and the National Examiner. Particular unease lies around its reported pre- and post- election collaboration with President Trump.
The New York Times says: “The bond between the candidate and the tabloid… led American Media, in the campaign’s final months, to buy and bury the story of the alleged affair between Mr Trump and Ms McDougal (aka Stormy Daniels). To pull it off, American Media acquired the rights in exchange for $150k and a commitment to promote Ms McDougal’s career as a fitness specialist. More recently, the Enquirer (which once published pictures of Elvis Presley in his coffin) promoted lurid stories about Amazon’s Jeff Bezos, who accuses the title of blackmail.
Chatham fund managers have been alarmed by the proprietorial behaviour of chairman and CEO (and small shareholder) David Pecker at a time when it is struggling financially with $400m of borrowings. He now says that AMI is shifting its emphasis away from tabloids to glossies such as Us Weekly and Men’s Journal, its fitness magazines, and the adventure sports brands acquired from The Enthusiast Network in February. But, after months of wallowing in the pain and power of his tabloids, Pecker is a very recent convert to the superior values of his specialist portfolio. It may, therefore, not be too much of a surprise that he is now believed to be negotiating a non-standard divestment of his beloved tabloids: a sale which sounds more like a licensing deal and will involve service payments to AMI over the long-term.
While Pecker is the boss, perhaps nothing will ever be quite straightforward. So you can guess what might just come next for the man who has been at the helm of AMI for 20 years through boom, bankruptcy and bargain-basement deals. The US President would miss his favourite media boss.
News. Independent News & Media (INM), Ireland’s largest newspaper group which publishes daily and Sunday papers such as the Irish Independent and the Belfast Telegraph, along with regional titles, has notified the Dublin stock market of a takeover offer from an as yet unnamed source. The current market cap stands at €135m, with €82m of cash in the business. The group’s largest shareholder (with 29.9%) is Denis O’Brien, who previously ousted Tony O’Reilly, the now bankrupt former Heinz president, rugby international, and Irish business superstar. O’Brien bought his shareholding for a total cost of some €500m.
In its expansive heyday, INM was a significant media group in the UK, South Africa, Australia and New Zealand. O’Reilly, who was Ireland’s richest man, reportedly lost his fortune in a failed attempt to revive the glass and china manufacturer Waterford Wedgwood – and as a result of borrowings at INM and trading losses, including at The Independent in the UK. The company, which once owned about 200 media brands, was worth a peak €1bn before the 2008 global banking crisis. Potential acquirers for INM may include European groups Axel Springer, Schibsted, Sanoma or a consortium of Dublin based investors. Apparent UK interest from News Corp and the Daily Mail Group is said to have ended at an early stage.
B2C. Boston-based private equity firm Great Hill Partners is acquiring Gizmodo Media Group (owner of Jezebel, Deadspin and The Onion) from Univision Communications. The price is believed to be under $50m – about a third of the $135m Univision paid just three years ago when it acquired most of the Gawker Media sites via a bankruptcy auction in 2016, after they had posted a sex tape of the former wrestler Terry Bollea (aka Hulk Hogan). Hogan had successfully sued Gawker, secretly backed by the billionaire Facebook director Peter Thiel, who had held a longtime grudge against the owner-founder, British-born digital entrepreneur Nick Denton.
Univision is now walking back from the short-lived English language media strategy it had been pursuing when it acquired Gizmodo and The Onion in 2016-7. It’s going back to its Spanish speaking heartland. The deal also include sites like Lifehacker and Jalopnik which will be operated by a new company G/O Media to be run by James Spanfeller, ex-CEO of Forbes.com, PC Magazine and RealClearPolitics, who also founded the Daily Meal.
G/O Media claims to have 100m monthly uniques, primarily in the 10-34 age group. Great Hill Partners has previously invested in a number of digital media companies, including Ziff Davis, career website Recruiting.com and obituary search tool Legacy.com.
B2C. DC Thomson, the Scotland-based, family-owned media group, has acquired PSP Media, the organiser of the Scottish Golf Show and Girls’ Day Out, in a deal which includes all the group’s print, events and digital assets. PSP, founded in 1995 with Bunkered magazine, will continue to be based in Glasgow. DC Thomson had acquired No.1 magazine from PSP in 2015 and now aims to find further synergies and growth opportunities including through B2B and B2C events and digital platforms. In September, it acquired the UK specialist magazine publisher Aceville in a deal estimated at £20m. Last month, it completed the acquisition of Kingdom FM and Original 106 to consolidate its position within Scottish radio.
In 2017-8, the 113-year-old DC Thomson made £71m of pre-tax profit on £191m of revenue from a portfolio spanning historic Scottish newspapers (in Dundee and Aberdeen), quaint old-fashioned women’s magazines (The People’s Friend and My Weekly), online genealogy (FindmyPast), Puzzler publications, and the free weekly Stylist which was acquired for £14m in 2016. Some 20% of DC Thomson revenues are from outside the UK (mainly the US), and 19% of all revenue is digital.
B2B. PEI Media Group, the UK-based international publisher of B2B information for private equity, has acquired US-based Argosy Group LLC from Simplify Compliance. Argosy, established in 1994, also provides information to private equity and VC markets across information products, online, events and databases. Terms of the transaction were not disclosed.
B2C. Property Finder, the UAE-based real estate website has agreed to acquire its competitor JRD Group which owns Justproperty.com and SaaS offer Propspace, as part of its growth strategy across the region. JRD was founded in 2008, receives 400,000 monthly uniques and its founders, Alex Nicholas and Siddharth Singh, will stay with the company and become shareholders in Property Finder. Property Finder has raised $120m from equity firm General Atlantic, giving a valuation of almost $500m. Last week, the company also raised its stake in Zingat, an equivalent property website in Turkey.
Books. US children’s publisher Jump! has acquired curriculum publisher Bearport Publishing. The brand will continue to publish early-reader non-fiction titles to add to its backlist of over 1,000 titles. Founder of Jump! Gabe Kaufman began his career at Bearport before establishing the rapidly growing imprint Jump! in 2012.
B2B information. Metropolis Group, of the UK, has acquired the financial information division of Centaur Media for £5m in cash. The deal involves the advertising-led Money Marketing and Mortgage Strategy, and the subscriptions-based Platforum, Taxbriefs and Headline Money. Together, they made 2018 operating profit of £1.2m on revenues of £8.2m. The revenue (some one-third of which is accounted for by subscriptions) has declined by 15% over the past two years, while profit has increased by 50%. But the acquisition price is less than the £8m Centaur paid 8-9 years ago only for the subscription businesses Platforum and TaxBriefs.
The divestment is the first of a series planned by Centaur (including its exhibitions and legal publishing) which will leave the company focused solely on the marketing services sector where its key brands include Marketing Week, Festival of Marketing, Oystercatchers, and eConsultancy. The inevitable problems in conducting 4-5 auctions concurrently include the implied need to sell each group of assets at the best price on offer, almost whatever it is. Some deals may inevitably defy the forecasts and disappoint shareholders.
This deal serves to highlight the growth of the 25-year-old Metropolis Group which has acquired a succession of (mainly B2B) magazine-centric businesses in the UK for prices that are seldom outside the range of 4-5 x EBITDA. The company now owns some 35 B2B brands, almost one-third of which (including Local Government Chronicle, Construction News, and Nursing Times) were acquired from Ascential for £23.5m in 2017 @ 3.4 x EBITDA.
The tight pricing (and clear website guidelines for those wishing to sell businesses to Metropolis) seem appropriate for a company majority owned by a fund manager, ex Bain and Schroder’s executive Jonathan Mills, and it’s working.The company’s last reported revenue was £43.6m with EBITDA of £7.7m. The former Ascential brands produced £4.6m of that profit – just for their first seven months under Metropolis ownership, which may make the purchase price a full-year multiple of less than 3 x EBITDA. Another steal.
Metropolis self-describes as “a fast growing group that specialises in business & consumer media and discount & loyalty programmes (Smartsave).” It employs some 500 people and has offices in the UK, Ireland and the US. CEO Robert Marr is building a strong media company. When he was appointed in 2012, 80% of the revenue was print advertising, today it has flipped to just 20%. A further 20% and 40% come respectively from digital and events, its strongest growth areas. It is not the first company to specialise in spotting the scarcely-hidden potential of acquiring unwanted assets from impatient larger companies with better things to do. Also in the UK, Mark Allen‘s opportunism has been masterly. While print is undeniably in systemic decline, many B2B magazine brands continue to be great platforms from which to launch digital media and events.
Presumably, Metropolis Group itself will eventually be sold-off or IPOd in order to maximise the return for its investor-owners. But, then, a bunch of “unwanted” B2B magazines are providing a pretty good flow of profits for their hedge funds so there may be many more low-cost deals yet.
B2B information. The disclosure this week that former Time Inc chairman and CEO Joe Ripp has invested alongside Ridgemont Equity Partners in Backstage (the US media brand for actors) has reinforced the speculation that the company is preparing to get serious about international expansion. The former Time Inc boss has joined the board of Backstage and everybody is talking about a pipeline of deals.
Ridgemont has described Backstage as “the global platform that enables productions, brands, marketing agencies, and businesses to discover and work with highly skilled creative talent” and says it receives over 4,000 roles each week covering every type of project, casting all across the US, UK, Canada, and Australia.” But it’s really a US business which started out in 1960 as a weekly newspaper for actors.
It now self-describes as “the biggest online casting platform in the US, providing actors and performers with the tools they need to build a profile, land auditions and receive career advice. Not only that, Backstage is also the place for casters to find talent and post jobs.” Its presence in the vibrant UK market is overshadowed by the family-owned casting and recruitment businesses operated by Spotlight and The Stage. But there are New York whispers that – among many other targets – Ridgemont wants Backstage to acquire and/or invest in Media Business Insight (MBI), the private equity-owned UK publisher of two principal magazine-centric brands, Broadcast and Screen International.
MBI was a c£12m MBO from B2B group Ascential Plc in 2015 and its private equity backers Mobeus are now planning their exit from a company which has not been a spectacular investment. In 2017, MBI had revenue of £12.3m and EBITDA of £1.6m which represented a 25% increase in revenue and 30% increase in profit across three years. There have been some disposals which probably improve the scores but it’s a modest private equity performance. MBI has growing operations in paid-for digital media and events – and 40% of its revenues come from outside the UK. Other attractions for would-be buyers may include 35% of revenues from subscriptions and 15% from events including the annual Media Production Show attended by more than 5,000 visitors and 150 exhibitors.
MBI is a well-managed company with some long-established brands, solid revenues, and deep expertise. It has real international presence in the film business and the potential to do so much more. It’s just too small, which is why it has caught the eye of Backstage’s owners as a buy-and-build base for their international ambitions. But they’re not the only ones. The acquisitive Penske Media (publisher of Variety, Deadline and much else) may also be interested in acquiring the London-based company. They’re all on the list.
Magazines. The UK specialist magazine publisher, the Enthuse Group, has bought a 51% stake in AA Media Ltd, the hospitality, publishing and merchandising unit of the AA, the UK listed car breakdown service, route finder, and insurance provider formerly known as the Automobile Association. The deal is reported to value AA Media (£17.5m revenue and £2.1m EBITDA in 2018) at about £10m.
Enthuse Group (formerly known as My Time Media) was co-founded in 2006 by majority shareholder and ex Daily Mail Group executive Owen Davies via a buyout of hobby magazines from Highbury House Communications which collapsed that year. It serves special interest groups with some 30 print, digital and event brands including Hi-Fi News, The Woodworker, Model Engineer, and Stamp magazine in the UK, and Shutterbug and Sound & Vision in the US.
The company has been growing rapidly, principally through the acquisition of seemingly unloved magazine brands from larger publishing companies including Time Inc and Future Plc. It acquired three US brands last year from The Enthusiast Network.In 2018, Enthuse Group reported revenue up 75% to £10.5m and EBITDA of £1.3m. It claims 250k paying magazine subscribers, 1.7m monthly uniques, and 1m YouTube monthly views. More than 30% of revenues are from outside the UK. The AA Media investment clearly represents a major step-up for the quietly ambitious UK company.
Books etc. The newly-established Welbeck Publishing Group, founded in the UK by Mark Smith (ex Bonnier) and Marcus Leaver (ex Quarto Group), has acquired the 27-year-old Carlton Books, publisher of illustrated books for adults and children, specialising in topics like entertainment, history, sport, arts, lifestyle, and puzzles. Its imprints include: Goodman, André Deutsch, Prion, and Carlton Kids. Carlton’s revenue fell 26% in 2017 to £10.8m with operating profit down 81% to under £300k, largely as a result of the end of a colouring book boom. Welbeck aims to grow through further acquisitions.
Interestingly, the Welbeck investors include the privately-owned Think Publishing. The under-stated London-based custom media company, which specialises in media mainly for B2B membership organisations, has revenue of some £15m, 80 staff and more than 42 clients served by offices in London and Glasgow. CEO and co-founder Ian McAuliffe says the company (co-owned with his wife Tilly) does “what it says on the tin. We are a membership communications agency. We specialise in publishing and all the things that are associated with it… sponsorship, events, exhibitions, digital, and email for membership clients. We do have a few traditional customer publishing clients, like First Great Western, the Preferred Hotels Group and others, but we specialise in membership and that’s one of our key differences.” In an era when most corporates are chasing members of one sort and another, Think is in a sweet spot.
Another distinctive feature of the 20-year-old company’s approach may be the consumer-magazine quality of its publications, even for some quite err narrow business and professional organisations. Think’s clients love it. In 2017, the company acquired the financially fragile Wanderlust magazine (which had losses of £336k that year). The 25-year-old publication offers scope for all kinds of diversification once the economics are sorted. It all seems to underline McAuliffe’s ambition to diversify using his company’s skills and profitability. We might expect further deals including self-owned B2B magazines, digital media and events – to balance Think’s portfolio of client contracts. Perhaps they will also take their membership media expertise beyond the UK by establishing low-cost joint ventures and partnerships in international markets.
The question might be whether the much-awarded Think Publishing starts to fulfil its wider ambitions before or after a private equity or media investor comes to call.
B2C digital. Big things are happening in the UK online car sales market. CarGurus, the US leader in used car sales, acquired PistonHeads from Haymarket Media and is working hard to catch runaway leader AutoTrader.
Haymarket CEO Kevin Costello told delegates at this week’s Digital Media Strategies conference in London that his What Car? brand was developing a strategy to chase down CarWow, the UK market leader for new car sales which has revenue of some £18m from sales of 60,000 cars (£300 per car sold by dealers). Whether What Car? (a major magazine-digital information brand in the UK) really can catch the turbo-charged CarWow is open to question, although the smart money may be on Haymarket striking some kind of partnership/joint venture with an existing operator. The potential shifts in car use, ownership, technology, and funding can be scary for established companies.
Meanwhile, Alex Chesterman, the digital Brit who founded Lovefilm (sold to Amazon for £200m in 2011) and the Zoopla property sales platform (sold last year for £2bn), has fund-raised some £30m from backers including the Daily Mail Group (DMGT). It’s all for this Summer’s launch of Cazoo, a site which will let customers buy and rent used cars. It will sell refurbished cars online, deliver them within 48 hours and offer a 7-day free return policy.
Chesterman, along with some of his latest backers, was an early investor in CarWow. He is now planning to buy thousands of cars and a distribution centre. The obvious risk of such operations is in the funding required to hold the stock (something CarWow never has to do, as a sort of lead-gen model).
DMGT was the largest shareholder in Zoopla as well as in UK comparison site Uswitch, and property site Primelocation. The news publisher had a successful track record of such venture funding (starting with Euromoney) decades before it became, well, fashionable.
Cazoo might be expected to test the resilience of the Buy-a-Car online sales operated by Dennis Publishing – and AutoTrader itself. Meanwhile, the increasingly powerful DriveTribe (“part social media, part publishing”), launched by former Top Gear TV star Jeremy Clarkson, is believed to have secured fresh funding after agreeing to slash its lavish budgets. Just in time. Some car brands really are now spending hundreds of thousands of pounds on DriveTribe content marketing because they love its technology, user-immersion and global reach. It might, after all, become the template for all kinds of special interest global networks. Phew.
B2B information. Acuris, the BC Partners and GIC-backed provider of financial data, intelligence and research on corporate financial performance and deal activity (formerly known as MergerMarket) has acquired (for an undisclosed price), the Hong Kong-based investigative research firm Blackpeak for its Compliance division. Acuris publishes MergerMarket and Debtwire and is itself the subject of acquisition interest from the likes of Fitch, Moody’s and S&P Global, with BC partners seeking an exit valuation of around £1bn, some three times the price BC paid Pearson/FT for the business six years ago – and 10 x what Pearson paid seven years before that. First round bids are due today (5 April) and, while the Wall Street Journal (News Corp) and Fitch (Hearst) have been publicly linked with Acuris, many predict that the smart global business – which faces increasing competition from Pitchbook (owned by Morningstar) and Bloomberg – will be bought by private equity.
Books. US academic book publisher Rowman & Littlefield has acquired the publishing imprints of Finney Company, a publisher, distributor, and manufacturer of educational materials targeting career and technical training and outdoor interests. The deal includes almost 400 non-fiction titles produced by 12 Finney imprints. The acquisition follows others made by Rowman & Littlefield in small niche areas it feels have been overlooked by larger publishing houses. The company, which is one of the largest independent book publishers in North America, was founded in 2013 – in London, UK. It publishes approximately 2,000 new books annually together with electronic editions.
Rowman & Littlefield
Books. Penguin Random House (PRH), the world’s largest trade book publisher, is expanding its share of leading the children’s market with its purchase of Little Tiger Group, the London-based publisher and packager of children’s books. As part of the transaction, PRH has also acquired UK-based packager Liontree Publishing which will be brought under Little Tiger Group. Monty Bhatia, the co-founder and CEO of Little Tiger Group will continue to run the business which was founded in 1987 and publishes over 200 titles each year. No terms were disclosed.
B2B information. Bonhill Plc, the AIM London listed B2B media business and owner of Investment News, is to acquire Last Word Media, paying an initial consideration of £8m (£6m cash and £2m shares). An earn-out may add a further £2m over the next two years. Last Word is an international B2B media business supplying information to the global asset management industry. It was launched in the UK in 2005 and currently has 71 staff in London 11 in Asia. Almost 60% of revenues are derived from events, the remainder from business information, data and content. Total revenue for 2018 was £10.2m with EBITDA at £1.1m. Bonhill focuses on three sectors: technology, diversity and financial services. Financial titles include consumer brands What Investment and Growth Company Investor in the UK, and Investment News in the US.
B2B information. vLex, the legal information publisher based in Barcelona and backed by Caixa Capital Risk, has announced the acquisition of Justis Publishing Ltd., a provider of online legal publishing, which will give vLex a stronger position in the UK legal market, allowing the company to build on the legal database content of Justis with vLex’s AI technology. Terms of the deal were not disclosed.
Magazines. Bustle Digital Group, founded in 2013 by Bryan Goldberg and targeted at modern women claiming a combined readership of 80m, has bought The Outline, a tech and culture website launched two years ago by Josh Topolsky, attracted by the company’s proprietary custom publishing platform. The Outline was rumoured to be valued at $21m in early 2018 following fund raising series but ad revenues failed to materialise in scale (an experience shared by its digital peers Vice Media, BuzzFeed and Mashable) resulting in staff cuts. All remaining 11 staff will transfer to Bustle. Topolsky still intends to launch a tech site The Input later in 2019.
Magazines. Private equity firm TPG Capital is entering the bidding for the purchase of Meredith Corp’s Sports Illustrated along with reported interest from News Corp, who are allegedly more interested in its digital property FanSided, and Ulysses Bridgeman a former NBA player. Meredith was reported to be looking for a price of $150m and a completion date in June for the magazine it acquired as part of its takeover of Time Inc.
News. After acquiring a large stake in Europe-based The Next Web, Nikkei, Japanese owner of the Financial Times, is thought to be buying another digital start-up, this time serving the Asia market: Singapore-based Deal Street Asia (DSA), which reports on finance, business verticals and start-ups. The company also operates the event Asia-PE-VC, this year in September. DSA was founded in 2014 and operates a subscription model for its premium content. Terms of the deal remain unclear. Nikkei are thought to be pursuing further digital acquisitions around the globe and may bundle their offer into a new subscription service. The FT is known to have offered to invest in and/or acquire The Information, Jessica Lessin’s high-rated (and solidly profitable) Silicon Valley information service.
Exhibitions. Exhibition organiser Easyfairs has strengthened its trade show portfolio by acquiring two mechanical engineering events from Clarion, FMB, and FMB-Sud, in Germany, which together claimed 750 exhibitors and 7,000 attendees. The privately-owned Easyfairs is itself the subject of speculation about a possible change of ownership, now expected later in 2019. But the privately-owned company is showing that it will keep adding to its portfolio. The company employs 750 staff and has a turnover of €157m. The terms of the deal were not disclosed.
Magazines. We all know it. This can be a golden time for specialist media produced by enthusiasts for enthusiasts. Niche publishers might still lose advertising to Facebook and Google, and copy sales to the free web. But these passionate, focused audiences can become buyers of more than magazines, books and digital information: e-commerce can provide new growth. However, two corporate announcements this month highlighted the divergent fortunes of specialist publishers pursuing e-commerce ambitions in the UK and US.
The UK-based Future Plc announced the acquisition of US digital publisher Mobile Nations. It was the magazine-centric company’s fifth acquisition in 15 months with total spending of some $300m. The latest US deal came as it reported 2018 EBITDA up by 88% and profit margin up from 13% to 17%. E-commerce accounted for $23.1m of revenues and had more than doubled in 2018. Shareholders of the company, founded 34 years ago by TED boss Chris Anderson, love its strategy: the share price has more than trebled in the past 12 months. It is becoming a multi-platform specpub by building proprietary tech, shifting its centre of gravity with targeted acquisitions, and recruiting a senior team of (largely) non-magazine people.
Across the Atlantic, the $90m-revenue F+W Media has a different story. It has been a prominent specialist magazine and book publisher since the 1913 launch of Farm Quarterly and Writer’s Digest (hence F+W). Its “passion” categories now include fine art, crafts, writing, collectibles, genealogy, gardening, woodworking, and astronomy. The company, that must once have been coveted by Future (and vice versa), has grown though a series of acquisitions, including book publishers David & Charles and Krause, Aspire Media, and New Track. In addition to magazines and books, it operates digital services, podcasts, online education, exhibitions – and e-commerce. Its major brands include: Coins magazine, Military Vehicles, Interweave, Quilting Company, Artists Network, Writer’s Digest, Antique Trader, Gun Digest and Popular Woodworking. But it all came crashing down this month as F+W filed for bankruptcy with net debt of at least $105m and a mere $2.5m in available cash. All its assets are now up for sale.
It is less than three years since a debt-for-equity swap cleaned out the company’s former private equity owners and provided what was supposed to be a lifesaving $15m. But it was too little too late and this month’s crash brought to an end the intervening years of asset sales, outsourcing, and 40% redundancies. It had been scrambling to stay afloat. Early explanations were that the company had struggled to compete against cheap (or free) online content but the real problem was a poorly executed e-commerce strategy. As the company began online sales of art, craft and writing supplies, it invested heavily in merchandise, the warehousing to store it, and the tech to manage the whole process. The company now admits: “Unfortunately, these additional obligations came at tremendous cost, both in monetary loss and the deterioration of customer relationships”. The damage was clear: F+W lost no fewer than 36% of its subscribers during 2015-18, while advertising revenue fell by 30%. It now says that the seemingly-expensive technology it purchased for e-commerce operations was either unnecessary or flawed, resulting in customer service issues that caused significant reputation damage. Far from saving the company, e-commerce was the only revenue stream that consistently failed to produce profits: last year, for example, $3m in craft revenues had a $6m cost of sales.
It’s a long way from 2014 (the year, incidentally, when Future’s CEO Zillah Byng-Thorne was appointed). That was when CEO David Nussbaum (now CEO of the high-flying America’s Test Kitchen TV shows) announced that F+W was “strategically moving away from our traditional roots in the media business to focus on its fastest-growing businesses, digital and e-commerce.” F+W was full of optimism and was said to have grown its e-commerce business from one “store” with $6m revenue to 31 “stores” with almost $60m. Nussbaum credited the apparent success to “hiring the right people.” But it is now clear that F+W under-estimated the cost and complexity of its e-commerce.
As a result, many of its larger creditors are those same technologists including Oracle (owed $953k) and Adobe ($695k), and thousands of others including printers and fulfilment companies. F+W never had the expertise or technology to match its ambitions to become a full-service online retailer and this, ultimately, wrecked its relationships with pre-existing print customers. Greg Osberg, the former president of CNET and Newsweek, who became CEO of F+W in 2017, told the bankruptcy court that F+W got almost everything wrong: “The company’s decision to focus on e-commerce and de-emphasise print and digital publishing accelerated the decline of the company’s publishing business, and the resources spent on technology hurt the company’s viability because the technology was flawed and customers often had issues with the websites.”
There’s nothing like bankruptcy for exposing the flaws in a strategy that once looked credible. We are all wiser with hindsight. But the F+W collapse does seem to expose some obvious strategic mistakes. The first point to make is that there is no single model for “e-commerce”. The catch-all term covers a range of online sales activity: from “affiliate” marketing of products on behalf of others (which reader-users click-through to buy from an established retailer), to full-service retailing in which the media company itself buys the stock and takes responsibility for delivery – and all the risk. In between, media can make bespoke arrangements with retailers including sales guarantees, volume incentives, and also provision for “lifetime” commission payments from future purchases by their reader-users.
F+W believed it had the skills and resources to be a full-service retailer and, in the process, managed to damage its pre-existing reader relationships. Media companies have loyal reader-users who depend on them for information, entertainment and a sense of community. But extending that relationship into retailing must include a cool calculation about whether such sales may compromise a media brand’s independence and authority. That may help a media brand to focus on specific products and services, as well as defining the interaction (or not) with editorial content or the brand itself. But, even after satisfying that test, publishers must recognise that operating as a full-service online retailer at scale requires some “non media” resources in order to meet the expectations of customers accustomed to Amazon or ASOS.
That’s where we come back to Future Plc. The UK company itself has had more than its fair share of near-death experiences since it IPOd in 1999 (the year, incidentally, when F+W’s Rosenthal family fatefully sold their third-generation company to investors). But it is now building an increasingly global business where reader-users across tech and hobby markets are fuelling strong growth in e-commerce. It is difficult to know where to begin in contrasting Future’s strategies, proprietary tech and marketing skills with the F+W debacle. But we can start by saying that, for all its profitable growth in affiliate e-commerce, Future doesn’t have warehouses full of things to sell to its reader-users or a distribution chain to deliver them. It now generates almost 20% of revenues from e-commerce commission of some 4-5% on purchases by readers (up to 50% through Amazon). But Future knows it is not a retailer. Go figure.
Informa, the £9bn UK-based B2B events, information and research company which is the world’s largest exhibitions group, has launched “a founder-friendly venture capital fund that makes early stage investments in the Knowledge & Information economy”. The company will offer capital, access to markets, mentorship and expertise to entrepreneurs and founding teams, focusing on start-ups whose products and services are based on content, intelligence and connections, and “where founders have clear vision of how disruption and innovation will challenge and shape these markets”. The fund is headed by the New York-based Richard Stanton, Informa’s Chief Digital and Innovation Officer, who says:”Our investment focus is on start-ups that operate in the global market for information services.” The fund will make Seed and Series A investments.
Magazines. The Sydney-based Rainmaker Group (which provides market intelligence, industry research, media, events and consulting for financial companies) has acquired the Sydney-based Money magazine from Bauer Media Australia. Money will become Rainmaker’s first consumer magazine, alongside the B2B flagship Financial Standard. Money was established in 1999, in conjunction with the eponymous Channel Nine TV programme, and claims to be Australia’s most-widely read personal finance magazine. It is assumed that Rainmaker will seek to grow its B2B and B2C financial media.
B2C digital. Stock trading start-up Robinhood has acquired media company MarketSnacks which focusses on the information needs of millennials. The six-year-old, California-based Robinhood, which has a claimed user base of more than 6m and is said to be valued at $5bn, charges no fees to users but earns money from interest earned on customers’ cash balances, margin lending, and “order flow”. The firm was founded by Vladimir Tenev and Baiju Bhatt who had previously built trading platforms for financial institutions. MarketSnacks, which produces a newsletter and daily podcast focussing on light-hearted finance commentary, will now be re-branded respectively as Robinhood Snacks and Snacks Daily. The co-founders of MarketSnacks, Nick Martell and Jack Kramer, will stay with the company and told Fortune magazine: “Robinhood’s done an amazing job at breaking down barriers of financial services and financial products, but users still need good information to participate and be well-informed.” Terms were not disclosed. Robinhood is reportedly planning to IPO in 2019.
B2B events.The 30-year-old Sunday Business Post, of Dublin (which has a printed circulation of some 25k), is acquiring the conference organising company iQuest from owner Michael Nolan. iQuest has an ambitious pipeline of events planned for 2019, following the completion of 14 conferences/summits last year across business, construction, banking and finance, IT and property.
Gaming. Liquid Media Group, of Vancouver, Canada, has agreed to acquire a 100% interest in the cloud gaming platform Open Nuage. Created by Throwback Entertainment, the platform is claimed to make playing (and developing) games faster and easier. Liquid Media self-describes as “a vertically integrated global studio producing content for all platforms including film, TV, gaming and VR through its network of shared services.” Price of the deal is $858,750 upfront in cash/shares with some performance-linked future payment.
Exhibitions. It is believed the US-based Northstar Travel Group is close to acquiring three UK exhibitions – The Business Travel Show, Meetings Show, and Travel Technology Europe – from Centaur Media. The annual two-day events are one part of the Centaur portfolio put up for sale as it prepares to focus on its attractive XEIM marketing services group, which includes Marketing Week, eConsultancy, Festival of Marketing, and Oystercatchers. The 25-year-old Business Travel Show is claimed to be the largest event of its kind in Europe, while The Meetings Show is said to be the UK market leader. The trade shows targeted by Northstar (which has similar events in the US) are reported to attract some 14,000 visitors and almost 1,000 exhibitors. They are believed to have aggregate revenues of more than £6m and at least £1.5m of EBITDA, which implies a likely price of £15-20m. Northstar’s portfolio of B2B travel magazines and information services and events have, in the past 50 years, been variously owned by Reed Elsevier, Rupert Murdoch, Bill Ziff and at least four private equity firms. The company produces more than 75 events in 13 countries in travel, hospitality and the meetings industry. Its brands include: Travel Weekly in the US, Asia and China, TravelAge West, Business Travel News, and Meetings & Conventions. It also owns Phocuswright international research and events, and the Burba Hotel Network. Northstar is currently owned by private equity firm EagleTree Capital. In 2016, it was said to have revenue of $80m with EBITDA of some $20m – more than doubled in the previous seven years. Northstar’s expansion beyond its domestic market has paralleled that of the 10-year-old, UK-based Jacobs Media Group, the events-led publisher of Travel Weekly (UK), The Caterer, and Travolution. Centaur Media‘s decision to divest almost 50% of its portfolio has followed 10 years of substantial change from print to digital. But the 38-year-old UK listed company, whose share price is a mere 50% of its IPO in 2004, has suffered from early decisions to remain a broad UK-centric B2B provider (principally across marketing, finance and law, but also in engineering and HR) rather than to specialise in one potentially global sector – as it is now choosing to do. Imagine, therefore, the bitter-sweet task of CEO Andria Vidler this week in announcing that the debt-free company had increased operating profit by 18% in 2018, with strong performances by many of the brands that will be sold. Further, just 30% of the £5.2m profit (but 60% of the revenue) came from the marketing group XEIM that will remain after the planned disposals. But shareholders will cheer the gutsy CEO if the auctions yield more than 60% of the 38-year-old Centaur’s £77m market capitalisation. The sell-offs are expected to be concluded in the next two months. At that point, XEIM (“excellence in marketing”) will be a highly-attractive marketing specialist – but sub-scale for a listed company. It might be expected either to make an already-targeted transformative acquisition or itself be acquired. Or it could become a private equity-backed MBO. Everybody’s quiet about the next steps. But the current divestment process will, inevitably, have helped would-be predators to clarify financials for the business that Centaur is not intending to sell. Just watch.
B2C digital. The eight-year-old Minute Media (founded in Tel Aviv but based in London) has acquired The Big Lead sports, media and pop culture website, which has some 2m monthly uniques. US news company Gannett had owned the lossmaking site for seven years. The deal, for an undisclosed price, highlights the rapid growth of Minute Media whose portfolio comprises: global football (soccer) site 90min; 12Up for US sports; and DBLtap for e-sports. It’s a “global digital sports media company powered by socially-driven content by the fans and for the fans”, who are able to create, publish, share and distribute content to millions of other fans around the world. After a 2018 funding round that brought total investments to $77m since 2011, Minute acquired trivia-focused digital media brand Mental Floss in September, from the estate of the late British publisher Felix Dennis. Asaf Peled, CEO and co-founder, says:“Our technology-first approach has allowed us to scale our owned-and-operated brands, and we’re implementing that same approach for the digital platforms that we acquire. The Big Lead is the perfect complement to our current portfolio and a strategic step in Minute Media’s evolution as we look to power more brands utilising our proprietary technology.” The company’s existing three sites have an aggregate 110m monthly uniques (70% from 90min) in 12 languages, and revenue that has increased from zero to $40m in just three years. Peled’s open tech platform enables avid sports fans to create large amounts of “authentic” content and, at the same time, allows mainstream publishers to integrate their own services with the Minute Media sites and vice versa. He says: “If you give sports fans the technology, they create the best content – and mostly for free.” Some 40% of Minute’s 200-person team are engineers. The sites have more than 5,000 contributors said variously to be submitting 500,000 items every year. But – and this is key – the content is heavily curated and only 30% of all contributed copy is actually published. Contributors range from would-be journalists simply to fans who might, in the past, have put the content on their own blogs. All contributors get paid, partly based on traffic. The essence of the sites, especially 90min which is already one of the world’s largest and fastest growing football sites, is that they are targeting a young, smartphone audience with services that are: snackable, short, viral, scalable and have lots of video. Peled says:“We have over 1,500 influencer communities integrating with our platform. One example is a group of Real Madrid fans in Vietnam. They will take pieces of our content and share them among their community, driving traffic to the relevant part of our site. It’s essentially a B2B2C model that is driving a lot of our traffic.” The company has publisher deals with the likes of Sports Illustrated, ProSieben, MSN, Yahoo, and USA Today, which pay to use Minute Media content on their own sites. To emphasise its strategic priorities (“The technology came first, and the media came second”), it started to sell advertising only in 2016. Last year’s $40m revenue is forecast to double again in 2019, so the business is now thought to be soundly profitable. Revenue is derived almost equally from three sources: direct sales of advertising and content marketing; programmatic ads; and platform revenues from those media partners. Peled’s assertion that this is a low-cost model by comparison with almost any other sports platform and that reader-users generate the most authentic content should strike a chord with media companies in sectors far away from millennial sport fans. Why wouldn’t this strategy work equally well for business people in individual B2B sectors and in specialist hobby and enthusiast markets? (Jeremy Clarkson’s UK-based DriveTribe does have similarities). Minute Media’s easy-to-use and powerful content platform has allowed it to grow globally, from a single location into a number of localised places. That’s what makes this exciting company one to replicate wherever readers are the real experts. Which, when you think about it, is almost everywhere.
Jim Murray Jones, CMO, tells the DriveTribe story at Digital Media Strategies 2019 on 2-3 April in London.
Magazines. Washington-based social sports, events and media company DC Fray (“We believe that play has the power to transform lives, build communities, and create positive impact in the world”) has acquired Alexandria-based monthly lifestyle and entertainment publication On Tap Media. Transaction terms were not disclosed.
Broadcast-streaming. Following its acquisition of Tribune Media, Nexstar will (under the terms of the agreements) see Tegna Inc acquire 11 stations in eight markets for $740m and The E.W. Scripps Company will acquire eight stations in seven markets for $580m. Separately, Nexstar remains engaged in active negotiations to divest two stations in Indianapolis, Indiana.
Exhibitions. The Australian-based, global events company Terrapinn (more than 500 conferences and exhibitions) has acquired the Accounting Business Expo and Accountech Live exhibitions in Australia, from National Media. Terms of the transaction were not disclosed.
Exhibitions. Reed Exhibitions’ games and pop culture division ReedPOP has acquired Florida Supercon, an annual convention held in Miami, Florida celebrating comics, superheroes, science fiction, anime, cartoons, video games, wrestling and all things pop culture. Terms of the transaction were not disclosed. ReedPOP was launched in 2006: “We try our hardest to bring massive amounts of fun and excitement to the lives of our audience by creating content and experiences that are original, exciting, memorable and exceptionally awesome.” Over the past two years, it has launched Comic Con Africa, and Keystone Comic Con in Philadelphia, expanding the portfolio to nearly 40 fan conventions around the world.
B2B information. Envestnet, a leading provider of systems for wealth management and financial wellness is to acquire PIEtech, Inc, creator of the MoneyGuide financial planning applications. Envestnet will acquire PIEtech for consideration consisting of $295m in cash, subject to certain adjustments, and approximately 3.185m shares of Envestnet common stock. Based on the closing price of Envestnet’s stock on March 13, 2019, the total value of the consideration equates to approximately $500m.
B2B information. FM Global, a large commercial property insurer, has invested $250k in AirWorks Solutions, a Massachusetts, USA-based startup that is developing aerial mapping software for mapping and surveying. FM Global will be partnering with AirWorks to apply their technology to property risk identification and loss prevention. AirWorks uses aerial data from drones, aircraft and satellite imagery to create layered sketches of location topography and conditions in near real-time, powered by artificial intelligence. This data can be used to help identify hazards, inform critical decisions and improve the timeliness and spend on construction projects.
News. What’s the future of the news business? As if the continuous bleeding of daily newspapers was not enough, the bright young things of digital news are also in crisis. Thousands of people have been laid-off at BuzzFeed, Vice, Vox, Mic, and Huffington Post. It is easy to see that news has become a much smaller business with a profitability that, at the very best, will not satisfy most of the companies made powerful by a golden century of daily newspapers – and nowhere near the scale of digital-only companies that once seemed sustainable. The need now to depend on reader revenues more than advertising is one obstacle but, equally challenging, is the drive for entirely new digital business models rather than tweaking those that served publishers so well in print. The defining issue of all digital media is that reader-users-viewers can be persuaded to pay but only really for exclusive content they cannot find anywhere else. The generally-available news that continues to dominate the print and digital output of daily news brands will not cut it, especially when sold as part of an indivisible bundle. It is 18 years since iTunes started selling individual songs instead of whole albums, and yet most dailies stick with the all-or-nothing bundle even in digital -because they are trying to defend their print profits. Newspapers are left to contemplate a future of being squeezed both by the digital behemoths and the agile specialists. It’s a fate that once befell medium-sized airlines, squashed between world leaders and budget carriers. For most news media, the future is all about targeting a niche not the Facebook mass market. The latest candidate aiming for specialist success is Tortoise Media, being launched in the UK as a “slow news” publisher of a daily smartphone edition of five stories. The service, which invites readers to attend editorial meetings and plans to publish a quarterly print magazine of “big reads”, is headed by James Harding, former editor-in-chief of The Times and of the BBC, and former Wall Street Journal president Katie Vanneck-Smith. Their manifesto is clear enough: “We hope that, if we take a little longer and open up the process of journalism, we can better understand these problems and foster new ideas. We’re trying to come to a better informed point of view on our future. In that sense, we’re journalism as a jury, with a hell of a caseload.” Tortoise went live with a daily newsletter in January (published, pointedly, at 11am London time, rather than for the start-of-day commuter journey) and launches formally in April. Statutory filings show it has raised some £6m from a combination of crowd funding and well-heeled individuals including former US Ambassador in London (and chief Obama fundraiser) Mathew Barzun. Vanneck-Smith says: “Slow news sums up a way of looking at the world – critically but reflectively and, wherever we can, optimistically. As humans, we can’t possibly see everything. So we’re not going to cover everything – part of being slow is about making choices, and taking our time to make those choices… making sure that as many people as possible are proactively engaged in contributing to the answers in a meaningful way, not just a vox pop thrown together on a street corner. You can’t do that in the normal news cycle.” The editorial meetings, to which members are invited and guests can pay to £25 to attend, are a fascinating experiment: “It is a forum for civilised disagreement. Modelled on what we call a ‘leader conference’ in the UK (or an editorial board in the US), it is a place where everyone has a seat at the table. It’s where we get to hear what you think, drawn from your experience, energy and expertise. It’s where, together, we sift through what we know to come to a clear, concise point of view. It is the heart of what we do at Tortoise.” You sense that the insightful and well-written Tortoise has been inspired by the “explainer journalism” of Vox and Quartz and also by Axios, another US news startup from the founder of Politico which claims to have “almost” reached breakeven on advertising alone within two years of launch, ahead of a subscription product launch. But it also chimes with Jessica Lessin’s neatly-profitable The Information, with which it shares an emphasis on content quality not quantity, subscriptions, and no advertising. Tortoise’s soft-voice informality and its enthusiasm for reader interaction echoes The Information’s sense of community. When it comes to the hard financials, Harding’s 40-person team (30 of them journalists, including some UK stars) may bring annual costs to some £5m. With 6k current subscribers paying an average of £70, the company might expect to reach 20k subscribers soon after launch and perhaps 30k within 12 months. If so, annualised income would be some £2-3m, producing an initial operating deficit of perhaps £2-3m per year after launch. So, even without any additional debt, the shareholders’ initial £5.8m can give the company up to three years of funding. So far so good. But they’ve got to get and keep those subscriptions, and there are plans to expand the staff and also to internationalise the service. So, Tortoise may be budgeting for a much quicker subscriptions build-up. It is, though, projecting a break-even at 80-120k subscriptions – comparable with the 190-year-old UK political weekly The Spectator and the stylish digest The Week. This subscriptions target (which would produce annual revenues of some £6-7m) seems a bit steep. Not everyone will agree with one existing Tortoise subscriber who says: “It’s the news equivalent of dipping your head in a cool, glacier-fresh stream on a scorching-hot day.” But the experienced team is full of pre-launch euphoria. Despite familiar warnings that journalists often don’t make brilliant business people and some inevitable sniffiness about James Harding’s news idealism, Tortoise’s millennial-skewed audience will get the attention of UK newspapers. It will also help to illuminate the uniquely high-value of the opinion pages in quality daily newspapers – which is what Tortoise is (sort of) trying to be. This launch might, therefore, motivate some dailies somewhere to try packaging up their op-ed pages for a digital audience that doesn’t want all the news. Harding’s old paper The Times will jealousy guard its hard-won 140k subscriptions (out of a total daily circulation of 400k) with price and content wars if it starts to feel threatened. You wonder whether solid progress by Tortoise might even prompt a group of columnists to band together to offer their own direct-to-reader subscription service. Or some may defect to Tortoise. Any such shifts could leave some newspapers and magazines looking a bit, well, naked. Will Tortoise help to kick-start the unbundling of daily news media? It might just galvanise the UK’s vintage news brands.
Liz Moseley, of Tortoise Media, will explain the news startup’s strategy at the Digital Media Strategies 2019 Conference in London 2-3 April. Click the banner at the top of this screen.
B2B information. Incisive Media, of the UK, has acquired the 21-year-old Financial Services Forum membership community for marketing professionals in finance. The Forum is estimated to have 150 member organisations and a revenue of perhaps £1m with EBITDA margins of up to 20%. Incisive was founded in 1994 by media entrepreneur Tim Weller (ex VNU, Centaur, and Reuters), with the launch of Investment Week in the UK heyday of classified recruitment advertising. He started the business with little capital, a house in negative equity and three children under five years old. Incisive IPOd in 2000 with a market cap of some £70m. By 2006, when Weller led an Apax-backed MBO, its value was £275m. The following year it stretched out to acquire American Lawyer from Wasserstein for $630m – just in time for the world banking crisis to blow the company apart. The ALM company was bought back by Wasserstein in 2014 – for some $400m. Incisive’s portfolio of B2B brands includes Computing, Professional Pensions, CRM, Professional Adviser – and Investment Week. It is now privately-owned (by its directors) with projected 2019 revenue of £25m and 170 staff. With EBITDA margins of some 18% and a debt-free balance sheet, the company (with Weller as chair and Jonathon Whiteley as CEO) is celebrating its 25th anniversary far removed from a bumpy history of private equity and bank debt. It is now signalling a renewed ambition to grow strongly in its financial services and tech markets. More deals on the way.
Broadcast. CBS has acquired the remaining 50% stake in the cable network Pop held by Lions Gate Entertainment Corp., giving it complete ownership of the channel. The network, which airs series like “Schitt’s Creek,” had previously been a 50-50 venture between the two companies. Terms of the deal weren’t disclosed. CBS acquired its initial 50% stake in the channel for $100m in 2013 when it was known as the TV Guide Network. Since that purchase, the channel’s ratings among key demographics have declined and its national reach has fallen by 15%.
Broadcast. Bauer Media, Europe’s largest commercial radio group, is to acquire the UKRD Group, owner of ten regional radio stations across England, adding to its recent acquisitions of Wireless Local, Celador Radio and Linc FM. With a weekly reach of 722,000 listeners, UKRD Group represents a substantial addition to Bauer’s existing audience, bringing it closer to new regional markets across Yorkshire, East Anglia and the south of England. Transaction terms were not disclosed.
B2C Digital. Canada-based mountain bike website Pinkbike has acquired the road cycling site CyclingTips.com from BikeExchange. CyclingTips was founded in 2008 in Australia. CyclingTips merged with BikeExchange, an online marketplace, in 2015. It began US coverage soon after. Transaction terms were not disclosed.
B2C Digital. Gegs Capital Corp is acquiring for $27.5m, UMG Media, an eSports company in North America, offering gaming entertainment, live events and online play. UMG entered eSports in 2016 with the acquisition of UMG Events LLC which was founded in 2012. UMG has approximately 2.1m registered users and over 18m matches played live and online through its platform. UMG made $2.35m revenue in 2018 but is heavily loss-making.
Exhibitions. Diversified Communications, of the US, has bought from Germany-based Solar Promotion International and FMMI, three annual energy-related events held in San Francisco. Diversified will organize the Intersolar, ees and Power2Drive North America events, and relocate them to San Diego next February. Terms were not disclosed.
B2B Information. A property search specialist based in Colchester, UK, has been acquired by Dye & Durham Corporation, a provider of software for the legal and professional services sectors. Index Property Information was formed out of the demise of the home information pack era by three founding partners who all ran successful local search companies. Transaction terms were not disclosed.
The internet demands media specialisation, whether in content, delivery or audience. Arguably, that’s a reversal from the heyday of print media when advertising often upstaged copy sales, relegated readers and pushed for ever larger audiences because that produced even more ads. Free “promotional” copies, constrained cover prices, and non-core readers were, perversely, good for profits.
The sugar-rush strategies only caused self-inflicted wounds when Google and LinkedIn arrived to suck up the advertising. For all the talk of journalism being subsidised by ads, those same clients also funded what became unsustainable increases in costs and staffing. Beyond all else, print media enjoyed decades of limited competition, due to their scale economies in print, distribution and sales. But, in a largely post-advertising world, the search for a sustainable business model now goes back to readers. Nowhere is this clearer than in B2B media which was long dominated by racks of single-sector trade magazines published by magazine conglomerates, especially in the UK and US.
Whether or not print survives in any given business and professional sector is less important than the fact that (in most cases) it can now only be relatively small, compared with the rich potential for live information, events and services. The internet has brought into the realms of B2B media a range of high-value business services that were once provided by other specialists. Some B2B media companies now provide consulting, executive search, market price reporting, research, and workflow systems as well as news, data, and events. These immersive strategies enable “narrow but deep” specialists to develop diversified and recurring revenues beyond the whims of advertisers, and to be embedded into their global markets and be not just, well, media.
This attractive model of integration is helping to create an increasing number of single-sector specialists, especially in the UK, where recruitment classified advertising and a handful of large companies had, for decades, accounted for more than 100% of all B2B magazine profits. Here are some stand-out UK examples:
The private equity-owned AgriBriefing was launched in 2010 by long-time B2B executives. Its path from operating as a UK-centric publisher of digital and print media, medical and agriculture sectors to becoming an increasingly global specialist in food and farming is a perfect case study. The fledgling company’s emphasis on creating membership, building events, and acquiring high-value data including ‘price reporting agencies’ helped it deliver strong growth, not least in the revenues of the 175-year-old Farmers Guardian weekly. It also motivated the founders to ditch media and medical and seek global leadership in food and farming. The success was consolidated by acquisition of the 40-year-old LAMMA agricultural machinery show, the launch of the CropTec exhibition for arable farming, and LAMMA Exchange machinery digital classifieds. Then came the rapid climb up the B2B value chain with well-targeted data-rich acquisitions. In 2014, AgriBriefing paid some £300k for the Agrimoney investment site which gave a foothold in the international agribusiness and commodities market, where it claimed 70,000 users in 170 countries. Next came the complementary £13m acquisition of Global Data Systems, the France-based owner of FeedInfo, the pricing platform for global animal feed. In 2017, it plunged into the US market with the £17m acquisition of Urner Barry, the 160-year-old provider of news and prices in the poultry, egg, meat, and seafood segments of the food industry. That deal alone was said to have added more than 3,000 clients. Now, the once UK-centric business has some £30m revenues, 50% from non-UK markets, and more than 50% from subscriptions/membership. EBITDA profit margins are estimated to be some 30%, and the total audience is claimed to comprise some 500k agribusiness professionals in 200 countries. The company is now believed to be negotiating the acquisition of Informa’s £30m-revenue Agribusiness Intelligence and Inflexion’s £40m-revenue Kynetec. If these deals are concluded, they would make AgriBriefing a clear leader in global farming-food prices, research and consulting – with considerable scope for further consolidation of what has been a heavily fragmented market. The appetising combination would turn the nine-year-old B2B startup into an international information specialist employing some 500 people, with £100m of revenue, perhaps £40m EBITDA and a valuation of more than £400m.
Carnyx Group, publisher of The Drum information and services for the international media, marketing and advertising industries, was founded in Scotland in 1984 to publish B2B magazines initially in architecture, law – and marketing. More than 15 years later, it chose to concentrate on the media-marketing sectors – and to go global. Today, The Drum (formerly ScotMedia) has an estimated revenue of £8-10m, EBITDA margin of c10%, and 90 people in Glasgow, London, New York and Singapore. It is “the most widely read marketing web site in Europe” with a claimed 1m monthly visitors, 30% from outside the UK. CEO Diane Young says the company’s base in Glasgow contributed significantly to The Drum’s success: “It’s… a little bit of luck I suppose from where we came from in Scotland. You couldn’t sustain different magazines for all the different parts of marketing for PR, design and advertising so we covered them all and, as time has gone on, the market has changed so that actually all the different disciplines are converging.” The Scottish base also gave the company low costs and an ability to survive those early painful years and to build audiences patiently. Unlike key competitors Marketing Week and Campaign in the UK and Advertising Age in the US, The Drum’s lively web site is free while revenues are generated from content marketing, research – and 30 annual events (which account for 40% of revenues and perhaps 100% of the profit). The company has also built its impressive Recommended Agency Register “that helps brands to choose agencies based on ratings. It is a bit like TripAdvisor where you don’t just blindly go in and you know, choose your agency. You get some real insight into what it is like to work with them.” It is easy to sense that, after years of struggling, The Drum (still owned by its three founders) is on the brink of major breakthrough. There are all kinds of companies which might value it highly, including Penske (Deadline, Variety and WWD), Crain (Ad Age and Creativity), Centaur Media (Marketing Week, eConsultancy, Festival of Marketing, and Oystercatchers), Haymarket (Campaign, Brand Republic and PR Week), and Prometheus (Hollywood Reporter and Billboard). Perhaps one of them will want to get The Drum’s team to manage their own properties in the sector, a sort of reverse takeover. A world of possibilities.
Jacobs Media Group
It is 10 years since the restless travel entrepreneur Clive Jacobs acquired the UK trade magazine Travel Weekly from Reed Elsevier. It had once been part of the expensively global and ultimately ill-fated Reed Travel Group, incorporating not just Travel Weekly in the US and across Asia but also the OAG aviation data group, and Hotel & Travel Index. But Jacobs bought the UK edition as Reed’s local subsidiary made its big shift from domestic B2B print to global data-tech. Most of Reed’s non-UK travel operations (including Travel Weekly in the US and Asia) became part of what is now the Wasserstein-owned Northstar Travel Media. Three years after buying Travel Weekly, Jacobs Media Group (JMG) acquired an even longer established print brand from Reed, The Caterer. The six years since have witnessed JMG’s transformation from a dependance on print to what is rapidly becoming an international events business. It self-describes as “Europe’s largest travel & hospitality B2B media company” and is believed to have made 2018 adjusted EBITDA of £1.3m (2017: £893k) on £11.5m revenue (£10.6m). Revenue has more than doubled in the past five years, almost exclusively through organic development. It is believed that some 50% of revenues (and rising) come from events and about 30% from outside the UK, a substantial shift in the past few years. The company, whose “newer” brands include Travolution, Aspire, Connections, and ATAS, operates more than 120 events annually. JMG still publishes the print trade magazines with which it started but now claims 650k monthly uniques for its travel and hospitality web sites. The privately-owned, London-based JMG has impressively weaponised its print brands and seems to have found plenty of growth by pushing into events and internationally. You can bet that companies like Northstar, Ascential, and OAG are keeping watch on Jacobs. Perhaps even exhibition organisers like the UK’s Tarsus and Reed (both of which have travel trade shows) might just be reviewing the options. But consumer operators like CNN and Discovery’s Travel Channel, and the UK’s travel-involved Daily Mail and Telegraph newspapers may also be followers. You also wonder where the upstart Skift might figure in this sector’s deals in the future.
The 15-year-old London-based Procurement Leaders (formerly called Sigaria) has given a voice to an international market of professionals once known primarily as ‘purchasing directors’ but now mostly Chief Purchasing Officers or Procurement Directors. It was founded by Alex Martinez, Mark Perera and Richard Pope as “a global membership network serving major corporations and procurement, sourcing and supply chain executives.” It provides independent intelligence, professional development and peer-to-peer networking through online, events, publishing and training. It has an international client base of some 700 leading companies with 15,000 members and hundreds of thousands of senior executives accessing online news, benchmarking and other services each year. The company employs some 120 people (50% in membership functions) spread across offices in the UK, US, and India – and has revenue of £12.3m. It exploits the rising importance of procurement in international companies which now realise that these functions can be the key to strategic supplier relationships, production security, reputation, and risk management. Martinez got the idea for Procurement Leaders while working for a recruitment software company almost 20 years ago, during the crazy times of the first dotcom boom. He found himself selling to purchasing departments and realised that these executives were often the unsung heroes, seen as the difficult people who pared down budgets and struck fear into the hearts of visiting sales people. But, all their hard work found its way straight to the bottom line. Martinez and his co-founders (none of whom had previous experience either in media or purchasing) set out to extract and centralise the knowledge from among the best minds in procurement and share the insights with a wider group via the whole range of platforms. They quickly discovered how readily even highly-competitive companies would share information in order to get something valuable (other people’s data) in return. Procurement Leaders, 60% of whose revenue is membership subscriptions (39% is events), is growing strongly on the back of its unique database – intellectual property provided (and constantly updated) by the membership itself. CEO Nandini Basuthakur says CPOs are uniquely able to learn from their thousands of suppliers in many of the world’s best companies. Her “Supplier Enabled Innovation Centre” is intended to emphasise the opportunity that CPOs have to improve the efficiency of their own companies. The capacity of Procurement Leaders to grow substantially is underlined by its 2017 results. While revenue was up by 8% to £12.3m, adjusted EBITDA actually dropped by 18% to £938k. But this reflected a strategy to increase membership revenues by adopting corporate enterprise licenses instead of a seat-based license model. This has resulted in 35% growth in the average value of annual membership contracts. This is almost certain to have produced strong profit growth in 2018. A sign of the expansion potential, after a fair few years of erratic financial performance, is the geographical profile of revenues which – in 2017 – were 36% from the UK, 28% each from the US and from Europe, the Middle East and Africa. The US and Asia were the fastest growing. It is revealing to hear members of Procurement Leaders talk about the company as if it is a professional association; they have a strong sense of belonging. It’s the kind of relationship and support that companies of all kinds would die for and that includes the major consulting firms that will – one day – be lining up to acquire the still privately-owned company.
These are just four examples of B2B specialists in the UK which are increasingly attracting the attention of investors, especially in private equity. But there are many other single-sector B2B companies with £10-20m-revenue in, for example, the finance, law, education and film/TV sectors. Not all would even think of themselves as media companies. But they share a commitment to the information requirements and relationships of a specific market sector.
Some (like Procurement Leaders) are funded largely by their readers/members. Others (like The Drum and Jacobs) are more dependant on events. Some (like AgriBriefing and Jacobs) have used traditional media as a springboard to international expansion in digital media and events. Some are more obviously embedded in their markets than others but all are focused single-sector specialists.
Most have not gone very far at all in seeking to “own” key industry statistical information in their sectors, which would be nirvana for any data business and whose compilation remains easier for specialist publishers than almost anyone else. But, together, these entrepreneurial UK-based companies do demonstrate the breadth of high-value business opportunities in individual sectors. To think, B2B media success was once all about publishing trade magazines in as many sectors as possible.
B2B. The UK-based Times Higher Education (THE) has been sold to private equity firm Inflexion, becoming a stand-alone business for the first time. The deal follows THE’s carve-out from its parent company TES Global. THE was previously owned by US-based TPG Capital, and along with its long-time stable partner TES (formerly Times Educational Supplement) has been owned by a series of private equity firms since 2005. Transaction terms were not disclosed.
B2C digital. UK-based tech-mag company Future Plc has acquired US digital publisher Mobile Nations for a price which could eventually total $120m. This acquisition further extends Future‘s reach in the US. Mobile Nations’ properties focus on consumer electronics, combining content, community and e-commerce. Notable brands include Android Central, iMore, Windows Central and Thrifter with a monthly audience of over 40m technology enthusiasts. Mobile Nations had 2018 revenue of $16.4m and EBITDA of $8.2m. The initial cash consideration is $55m with a further $5m in shares. In addition, a further variable deferred consideration up to a total value of $60m will be paid, subject to meeting financial targets in the year ending 31 March 2020. The deferred consideration is expected to be split equally between cash and shares in Future, although Future retains the right to pay the full balance in cash.
B2C digital. The Utusan Group, a media conglomerate in Malaysia, has acquired a 60% stake in Media House Entertainment (MHE TV), an entertainment news portal in Malyasia that provides trending news and videos covering celebrities, food and travel. Transaction terms were not disclosed.
Exhibitions. Launched in 1993, the annual, Mumbai-based BIG7 event is India’s largest trade event for gifts, stationery, writing instruments, office supplies, gadgets, houseware and home décor. Transaction terms were not disclosed.
B2B. The Financial Times has acquired a controlling stake in the Amsterdam-based TNW (The Next Web), an events and media company with a focus on new technology and startups in Europe. Transaction terms were not disclosed. The deal would fit well with what is rumoured to be an impending investment in the San Francisco-based tech newsletter The Information.
B2C digital. Bauer Media Group has acquired CrediMarket, a Spanish e-commerce platform for financial products. This acquisition is Bauer’s first move into the Spanish OCP (Online Comparison Platform) market. Bauer Media Group also owns OCPs in Finland, Norway and Sweden (Zmarta), the Czech Republic, Slovakia (NetBrokers Holding) and Poland (Rankomat). Transaction terms were not disclosed.
B2B information. Daily Mail and General Trust (DMGT), which holds more than 49% of Euromoney Institutional Investor, and is its largest shareholder and founding investor, plans to return all of its shares in Euromoney Institutional Investor and £200m cash to eligible shareholders.
Education. The Newhouse family-owned Advance has agreed to acquire Turnitin, a leading provider of education technology for academic integrity and writing solutions, from an investment entity affiliated with Insight Venture Partners, GIC and their co-investors. Turnitin serves over 15,000 institutions globally and is headquartered in Oakland, Calif., with international offices in the UK, Netherlands, Australia, Korea, India, and throughout Latin America. Transaction terms were not disclosed.
Broadcast. The Atlanta-based company, which currently owns or operates television stations and digital properties in 91 television markets, will sell WCAV-TV and WVAW-TV to a Lockwood Broadcasting Inc. affiliate and acquire WVIR-TV from Waterman Broadcasting Corp. Gray anticipates closing the transactions after receiving approvals in the second or third quarter. Transaction terms were not disclosed.
Exhibitions. The Paris-based GL Events, has agreed to acquire 55% of CIEC, the State-owned China International Exhibition Center Group. After the acquisition, the government will retain a 39% stake in CIEC, with its executives holding 6%. It is, to say, the least, unusual to see an international company owning a controlling stake in a Chinese State-owned enterprise and is said to reflect the strong relationships GL has built in the country over the last decade. CIEC has some 100 full-time employees. Revenues in 2019 are expected to be €40m (US$45m), with an operating margin of more than 35%. CIEC organises several events larger than 100,000 gross sq m, including Beijing Fabric Wallpaper Expo, Build & Décor Expo, the China International Door Expo and ISH China & CIHE serving China’s heating, ventilation and air conditioning industries. Transaction terms were not disclosed. The 40-year-old GL Events is one of the world’s 20 largest exhibition organisers, operating in 20 countries, with total revenue of some €1bn. It is a company listed on the Euronext Paris In addition to its owned exhibitions (accounting for c20% of group revenues), manages a network of 40 exhibitions and concert venues. Its exhibitions include: the Rio International Book Fair, Kidexpo, Exponaval and Piscine Global Europe.
B2B information. The US subsidiary of Haymarket Media Group has acquired the Florida-based National Association for Continuing Education (NACE) which provides live and online education programs for doctors. Although financials have not been disclosed, it is believed to have revenues of under $10m and will increase Haymarket’s medical information revenues by 10%. NACE annually organises 40 regional conferences, and will add 53,000 learners to Haymarket’s audience of 2.2m healthcare professionals. The admittedly modest acquisition almost marks the rehabilitation of the 53-year-old UK-based magazine publisher whose borrowings of more than £140m had once threatened its viability. The privately-owned group has been a dominant UK player both in B2B and specialist consumer media for more than 50 years, but found itself caught in a perfect storm. The post-digital shredding of print profits was accelerated by Haymarket’s own decision to debt-finance the buyback of large minority shareholdings from key executives who had managed the business for more than 25 years during founder Michael Heseltine’s political career, latterly as the UK’s Deputy Prime Minister. After a prolonged wobble, the company succeeded in eliminating its debt through property disposals, staff cuts, and the sale of 20 magazine, event and digital brands. A lot of pain. But, in 2017-18, Haymarket’s revenue was £163m (slightly down on the previous year) giving operating profit of £7.4m. While even that profit is flattered by some discontinued earnings, it is a picture of transformation. The disposals of the past six years tell the story of a company that has had to be as opportunistic in selling magazines as it had so often been in buying them. In 2016, it sold Motorsport, Motoring News, F1, and Autosport – magazine brands which had been at the core of the company’s long-time passion for motoring media. But the proceeds of some £13m were certainly useful. Last year, it netted £14m (perhaps 30 x EBITDA) for five typically-Haymarket consumer magazines (including Stuff, What HiFi? and FourFourTwo) sold variously to Future and Kelsey. Along the way, Haymarket sold, for nominal prices, six predominantly B2B magazines and events which may now account for 15% of the £50m revenue of the fast-growing Mark Allen Group. Last year, it even sold one of its great digital successes, PistonHeads , which it had transformed from a nerdy audience of 900k to 4m monthly uniques in 11 years. It is believed to have been generating a steady EBITDA of £1m at a 40% margin. But an estimated offer of £12-15m persuaded Haymarket to sell a business it had originally acquired for £1m. The breakthrough breathe-again deal, though, had been the £80m windfall sale of its Thames riverside film studios in 2015. Phew. All the deals leave Haymarket as a largely B2B information, content marketing and events company focused on established media and events primarily in the marketing-communications and medical sectors. Its key brands include: Campaign, Media Week, PR Week, Brand Republic, GP, Medeconomics, Mims, Finance Asia, and Management Today. Haymarket built its reputation by giving B2B magazines (like the legendary 50-year-old ad magazine Campaign) the design and content values of the sharpest consumer media. It was a pioneer too in the highly-profitable awards ceremonies that now crowd every B2B market, and in consumer exhibitions (it sold its JV with BBC Magazines in 2013). It’s always been great at events. In the 20th century heyday of the UK magazine market, Haymarket was a company which did things in style. It was no accident that Campaign effectively launched Saatchi & Saatchi in the 1970s (one of the brothers had worked for Haymarket): both companies seemed to share a sense of excitement and innovation. Although Haymarket retains some consumer brands (including What Car?, Autocar, and Classic & Sports Car), 80% of its c£145m global revenues now come from B2B (40% in the US, which generates 45% of the company’s medical market revenue). Some 52% of revenues come from the UK, 35% from the US, and 13% from Germany, India, Hong Kong and Singapore. For all the financial agony and snap disposals, Haymarket seems to have landed in a good place, with digital media now comprising 50% of revenue, events 25% and print less than 25%. The domestic pressures can be seen to have helped Haymarket fast-forward through traditional media’s own disruption, even though times are not easy. It has probably helped that, for all the churn and change, the company has been steady at the top. It’s still owned by the family of chair Rupert Heseltine. Lifer Kevin Costello has been CEO for a decade. They’re back.
Magazines. Dennis Publishing, the UK-owned publisher of the best-selling news digest The Week, in the UK and US, has acquired the 99-year-old Kiplinger Washington Editors, Inc. Kiplinger publishes the eponymous paid-subscription newsletters in business and personal finance. Its most widely read products are: Kiplinger’s Personal Finance, the 600k-circulation monthly magazine which is credited with having pioneered US personal finance journalism in 1947, and Kiplinger. com, its website with 4m monthly uniques. The company, which was founded in 1920 in Washington, DC, has been managed by three generations of the Kiplinger family. Dennis is a UK-based magazine publisher, founded in 1974 by the late Felix Dennis. The £190m-revenue company was sold to Exponent private equity for £170m last year. The Kiplinger deal is likely to figure largely in the expansion of The Week in the US, which currently has 550k paid-for print subscribers and 5.8m monthly uniques. But its brands might also be part of the strategy for Dennis’ UK-based Money Week. The Week’s readership success is based on its concise, well-written summaries and genuine balance in an increasingly polarised news landscape. It is believed to have ambitions to expand to other markets in Asia and Europe on the way to becoming a global print and digital brand. But this round of private equity ownership is focused on the US edition, evidenced by the inspired appointment of Jack Griffin (ex CEO of Tribune, Time Inc and Meredith) as Chair of Dennis. While the company remains a significant publisher of motoring, tech and hobby magazines in the UK, its profitability – and future growth – are heavily dependant on The Week. It will be interesting to see how many other specialist news-information businesses Dennis now seeks to acquire in the US and UK – and whether such activity is punctuated by the divestment of its traditional, low-growth magazines.
B2B information. Endeavor Business Media, of Nashville, has acquired former PennWell publishing properties from the Blackstone-owned Clarion Events including print and digital brands covering oil and gas, industrial technology, dentistry and water utilities. Transaction terms were not disclosed. The publishing assets had been part of a reputed $300m deal last year, focused primarily on growing Clarion’s exhibitions business. The acquisition grows the 18-month-old Endeavor to nearly $100m in revenue. It has more than 40 print and digital brands, 40 events, and almost 400 people. Its key markets include security, aircraft technology and healthcare. The company’s private equity sponsor is Nashville-based Resolute Capital Partners.
Exhibitions. Messe Düsseldorf’s India subsidiary has acquired the Famdent dental exhibition. The event will become a member of the MEDICAlliance, the umbrella brand for Messe Düsseldorf Group’s global healthcare exhibitions. Transaction terms were not disclosed. Messe Düsseldorf is the world’s 10th largest exhibitions organiser (by revenue) according to AMR.
Magazines. California-based Vinesse Wines has acquired Touring & Tasting Marketing and Media, the 23-year-old print and digital magazine which aims to promote “wine tourism”. The acquisition will enable it to: increase print circulation to 70k, twice a year and grow digital reach to 150k.
Broadcast-streaming. Nielsen has acquired Sorenson Media, a leading addressable TV technology provider that aims to help transform TV from a ‘one-to-many to a one-to-one’ medium by powering addressable ad delivery and measurement. Transaction terms were not disclosed.
Exhibitions. CyberRisk Alliance, the four-month-old B2B startup serving the cybersecurity and information-risk management market, has acquired the InfoSec World Conference and Expo from Southborough, Massachusetts-based MIS Training Institute. The 25-year-old show, which attracts 1,300 attendees and hosts 10,000 square feet of exhibit space in Orlando in April, is the first acquisition for CyberRisk Alliance, a company launched in November by CEO Doug Manoni (ex CEO of SourceMedia) and backed by the private-equity firm Growth Catalyst Partners which said: “This is an important milestone for CyberRisk Alliance, and it exemplifies our commitment to aggressively build a powerful and influential business-intelligence company serving this market of vital importance to our national and global security and economy.” Manoni has said he wants to build a $100m company within five years. Transaction terms were not disclosed.
Entertainment. Reach4entertainment enterprises plc (R4E), a UK-based entertainment production group (market cap: £15m), is to acquire 50% of Buzz 16 Productions Ltd. The terms of the deal were not disclosed. Buzz 16, which was founded in 2016, creates sports content and is co-owned by shareholders including former Manchester United footballer and broadcaster, Gary Neville, and former Sky Sports Premier League producer Scott Melvin. The R4E CEO is Marc Boyan, founder of the music-based investor Miroma, and the chair is Michael Grade, former Chair of the BBC and ITV. After a period of restructuring, the company (which is listed on the UK’s secondary AIM market) recently said trading had been ahead of its expectations.
Exhibitions. After two years of intensifying M&A, another of the world’s leading exhibitions groups, the Brussels-based Easyfairs, is believed to be up for sale. The private company owns 218 events in 18 countries across Europe, the UK, China, Russia, UAE, and the US. It is estimated to have revenues of some €180m and EBITDA of €35m. In addition to its trade shows, it operates 10 exhibition venues (totalling 225k sq m) in Belgium, the Netherlands and Sweden which host up to 500 events for other organisers. The 22-year-old company, which has trebled profits in the past five years, is among the world’s 10 largest independent exhibitions groups with B2B events in the energy, packaging, logistics, transport and healthcare sectors; it’s the 18th largest organiser overall, and employs some 800 people. The founder and owner is Eric Everard, a prominent Belgian entrepreneur who was once a director of Reed Exhibitions, responsible for the Cannes-based Mipcom and MipTV. He founded Artexis (venues) in 1997 and launched the European Student Fair a year later. Sixteen years on, he formed Easyfairs International to launch exhibitions, and merged the two companies in 2014. Easyfairs executives claim that 80% of the group’s profits have been reinvested in launching and buying shows and that the company has, therefore, been able to grow by an average of 13% throughout the past 20 years as it became progressively more international. It has been particularly successful in geo-cloning its packaging and storage exhibitions. But the step-change came with the 2016 acquisition of the Dutch group Evenementenhal which organises more than 70 B2B trade shows in agriculture, transport, logistics, automotive, shipping and construction. It also operates three venues in the Netherlands. The deal largely accounted for a 39% increase in revenues and catapulted Easyfairs into AMR’s global top 20 of exhibition organisers. Perfect timing. It is believed that many of the leading exhibitions groups and a long list of private equity firms are now interested in acquiring the company. In so many ways, it has the type of solid profitability, growth prospects and sector-leading portfolio that made Mack Brooks (with 30 exhibitions in 14 countries) such an attraction when it was auctioned late last year. But there are differences. Industry insiders reckon Easyfairs is heavily dependant on its hands-on founder who is still both CEO and chairman; and the venue management business (10% of Easyfairs) would be non-core for many exhibitions organisers – but, not of course, for the large city/state-owned exhibition hall owners in Europe and Asia. Those factors may make private equity firms the favourites to pay a possible €550m for Easyfairs. It seems unlikely that Reed Exhibitions will seek to acquire Easyfairs so soon after paying some €230m for Mack Brooks in the deal which completed this week. But it may be a prime target for the UK’s cashed-up Daily Mail Group (DMGT) which was last year outbid by Clarion Events for the $300m Penwell. The voracious Clarion will be in the frame again (its Blackstone private equity parent owns exhibition venues too). But will DMGT be hungrier this time for an acquisition which would almost double its exhibitions portfolio – and fit well with its energy and construction events, especially in the Middle East? It is assumed that Informa, still digesting UBM, will not be bidding for Easyfairs, and neither will the Paris-based Comexposium which is undergoing a change of shareholders. One of the wilder scenarios could see the merger of Easyfairs into Reed Exhibitions in order to IPO, which could be a neat result for the Everard family – and for the RELX parent for which Reed remains a strong but distinctly non-core asset. Maybe. But it’s sure to be another hot auction in a global exhibitions market where (in the latest survey by trade body UFI) up to 40% of companies said 2018 profits were 10% up on the previous year. No wonder private equity loves exhibitions.
Why are trade shows so hot? At the Digital Media Strategies 2019 conference in London on 2-3 April, Philip Soar, Chairman of exhibitions group CloserStill, will examine the enduring appeal of B2B trade shows and the role of digital technology now and in the future.
Exhibitions. France-owned Comexposium, the world’s sixth largest exhibitions group, has acquired IMOS, claimed to be the largest motorcycle show in Indonesia, which has been held every two years since 2014. It will be managed in a joint venture with Amara Pameran. Transaction terms were not disclosed. Amara Group manages over 20 trade exhibitions, seminars and consumer events, including JVs with Tarsus, Köln Messe – and Comexposium.
B2C digital. The A$6bn Seek, the largest jobs digital in the AsiaPacific, has acquired GradConnection in a move to target young jobseekers finishing up their education. Transaction terms were not disclosed. GradConnection was launched in Australia in 2008 by New Zealanders, Mike Casey, Dave Jenkins and Dan Purchas.
Broadcast-streaming. The privately-owned Georgia, US-based Cox Enterprises has reached an agreement with Apollo Global Management to sell a majority interest in Cox TV stations and also in its Ohio radio, newspaper and TV properties. Cox Enterprises will maintain a minority stake and will join the Apollo Funds in forming a new company to operate these stations, which will be headquartered in Atlanta. Cox TV stations in Atlanta, Charlotte, North Carolina, Seattle, and Boston, reach a combined 31m viewers.
Education. Pearson Plc is selling its US K12 courseware business to Nexus Capital Management for a headline consideration of $250m. Total proceeds comprise an initial cash payment of $25m and an unconditional vendor note for $225m expected to be repaid in 3-7 years. Following repayment of the vendor note, Pearson is entitled to 20% of future cash flows to equity holders and 20% of net proceeds in the event the business is sold.
Magazines. Sanoma is selling Mood for Magazines (MfM), publisher of personality magazine Linda, to Linda de Mol, its founder and minority shareholder. In 2018, MfM has revenues of €27m and EBITDA of €6m. Sanoma’s 86% share is being acquired for the equivalent of 7.9 x EBITDA – valuing the company at €47m. It has 53 employees.
Magazines. As part of its strategic refocusing around book publishing and retail travel, the Lagardère group completed the sale of most of its magazines in France (employing some 650 people) including: Elle, Version Femina, Art & Décoration, Télé 7 Jours, France Dimanche, Ici Paris and Public, to Czech Media Invest (CMI). The Lagardère group remains the owner of the Elle brand but has licensed its use to CMI in France, and to Hearst Corp internationally under a US$650m deal in 2011. The price of the French deal was €52m, for a business which, in 2018, generated revenue of c€239m and adjusted EBIT of c€22m. So Lagardere, whose Hachette subsidiary was once the world’s largest magazines group, has drawn down the curtain on almost 200 years.
News. The Nikkei-owned, UK-based Financial Times is believed to be negotiating to acquire or invest in The Information, the subscription-based digital media company founded by Jessica Lessin in 2013. The Information derives some 90% of its revenue from subscriptions (the rest from events) and more than 10,000 subscribers pay $399 for a service which now employs more than 20 tech reporters and has been profitable for more than two years. Subscribers get two exclusive (and sometimes ground-breaking) stories a day, invitations to networking events round the world, access to compelling telephone conferences, subscriber summits, and the sense of being part of Jessica’s network as one of the best-connected people in Silicon Valley. The content includes detailed organisation charts of leading tech companies and “courses” of emails on specific themes. Some media commentators were once sceptical about the all-subscriptions/ no-advertising strategy. But that was when the ads-supported BuzzFeed, HuffPost and Vice were spending like slam-dunk winners. It’s all different now. Quartz is adding subscriptions, so is Business Insider which led the sceptics at the launch of The Information. BI’s owner Axel Springer recognises that paid-for newsletters are the future of so much quality journalism. Everybody is following Jessica Lessin, and the business model for the upcoming UK launch of Tortoise (“slow journalism”) smacks of The Information. Many observers (and Lessin herself) actually believe she pitched the subscription price too low, evidenced by the high pass-on readership and a negligible churn rate. She is now selling gilt-edged VIP subs to (sort of) make up for it. The point is that this brilliant media success is based on the production of high-quality content you can’t get anywhere else – wrapped in some smart personalisation. It was Lessin’s frustration as a tech reporter on the Wall Street Journal that first got her thinking about the flaws of a conflicted journalistic model which depended on revenue from advertising as well as readers. She became fascinated by Politico and its ability to build a loyal paying audience, despite the prevalence of free content. Six years later, she says: “We’ve moved markets, gotten the early scoop on billions of dollars of acquisitions and told you what’s happening deep inside companies like Apple, Facebook and Google. Our stories have been followed by the Wall Street Journal, the New York Times, Bloomberg and other major outlets thousands of times. How we compete is simple. We recruit the best reporters, give them the freedom to write about important topics and tell them not to worry about the small stuff.” She used family money to start the San Francisco-based business and owns it 100%. It’s a funding model that has imposed a distinctly unfashionable sense of financial discipline – and has given her independence. But the obvious question she has been debating with a small group of advisors (including Politico and Axios founder Jim VandeHei, Paul Steiger, chair of ProPublica, and Tina Sharkey, of Sherpa Capital) is: how to grow from here? She has identified fintech, biotech and media as key areas of expansion. The 900k-subscribers, £300m-revenue FT likes Lessin’s strategy and has been discussing ways it could help to accelerate the growth, especially in Asia. The FT’s global reputation as a solid long-term supporter of quality journalism and also a supportive business partner has more than survived its 2015 acquisition by Nikkei. It could be a great fit for The Information if they get the structure and the deal right. Lessin has said: “We are pretty ambitious and we don’t want to close off an opportunity because it means joining up with an investor. But it would have to be a case of an investor helping us to go after a big opportunity we couldn’t go after alone.” Is that the signal the FT was looking for?
Magazines. Future Plc is re-acquiring from Immediate Media two professional road cycling magazines, the digital-only CyclingNews and the print ProCycling, which had been part of a cycling portfolio it had sold to Immediate for £24m in 2014. The Burda-owned Immediate has no plans to sell the other brands from that original deal including Cycling Plus, Mountain Biking UK and BikeRadar. The brands now being bought back by Future are reported to have advertising-heavy revenues of some £2m and an estimated EBITDA margin of at least 15%. It is believed Future is paying some £2-3m to re-acquire the magazines which it had sold at a time when the UK listed company had issued a profits warning followed by a 30% share price slump, the loss of 170 jobs – and a change of CEO. It is a long five years since then, and CEO Zillah Byng-Thorne has substantially transformed the formerly print-dominant, UK-centric Future into a £460m, debt-free, multi-media group with proprietary tech and diversified revenue streams, almost 50% in the US. This year, it is expected to make EBITDA profit of £34m (from £176m revenue) – some 60% ahead of 2018. Earnings per share are forecast to increase by 15%. The growth is being strongly driven by e-commerce and events in games, music, home interest, hobbies and associated B2B media. Key brands include TechRadar, PC Gamer, Tom’s Guide, Homebuilding & Renovating Show, GamesRadar, The Photography Show, Top Ten Reviews, Live Science, Guitar World, MusicRadar, Space. com and Tom’s Hardware. Future continues to be a significant print publisher with over 80 publications and some 500 bookazines per year. The 17% increase in Future’s share price in the past three months speaks volumes for investor confidence in the successful integration of last year’s major US acquisition of Purch – and of the likelihood of further deals in 2019.
Zillah Byng-Thorne, CEO of Future Plc, will be a keynote speaker at the Digital Media Strategies 2019 conference in London on 2-3 April, presented by Campaign magazine and Flashes & Flames.
B2C Digital. DMG Media Ireland (part of the UK’s Daily Mail Group), has acquired RollerCoaster.ie, a leading website about pregnancy and parenting in Ireland. Transaction terms not disclosed.
Broadcast. Gray Television is moving into new markets in New York and Minnesota via a purchase of United Communications TV stations. Gray will pay $45m total purchase price for the stations: WWNY-TV and WNYF-CD in Watertown, N.Y., and KEYC-TV in Mankato, Minn.
B2B information. The previously-announced $6.9bn sale of Dun & Bradstreet to an investor group led by CC Capital Partners, LLC, Cannae Holdings, Inc., Bilcar, LLC, Black Knight, Inc. and funds affiliated with Thomas H. Lee Partners, LP has now completed.
B2B information. Data analytics company Nielsen is the winning bidder for the assets of bankrupt television data provider Sorenson Media Inc, at a price of $11.25m.
Consumer events. Live Nation has acquired a majority stake in leading Spanish promoter Planet Events. Spanish media conglomerate Grupo PRISA will retain partial ownership of Planet Events and will continue to operate from the PRISA offices in Madrid. Transaction terms were not disclosed.
Radio. Bauer Media is acquiring the Wireless Group’s local radio stations in England and Wales, which claim a weekly reach of 850,000 listeners, adding to the purchase of Celador Radio and Lincs FM Group earlier this week which is an additional 1.1 million listeners. Wireless comprises 15 licences across Lancashire, Cheshire, Shropshire, Derbyshire, West Yorkshire, Staffordshire and South Wales. Celador adds 25 licences across East Anglia, Thames Valley, Solent and the South West and Lincs FM Group comprises of nine licences across Lincolnshire, Yorkshire and Rutland. Bauer is Europe’s largest radio group (with channels in the UK, Scandinavia, Poland and Germany) but is second to Global in the UK.
B2C Digital. Entertainment Daily owner Digitalbox, of the UK, has acquired Mashed Productions, the parent company of Daily Mash, for £1.2m. Digitalbox was recently bought out by investment firm Polemos in a £10m deal, which saw the holding company adopt the Digitalbox name and lay out plans to build a digital media company through acquistion. UK-based Mash Productions made £135k in pretax profit in the year to March 2018. The media brand also made a noted move into TV production with BBC Two’s The Mash Report.
Magazines. Alabama publishing veteran Matthew Allen has acquired the Birmingham Fun and Family Magazine from Jay Carr, who owned the publication for 14 years. Allen formed JBMC Media LLC to make the purchase. The monthly publication was launched in 1999 for parents, expectant parents and grandparents, and is available free at more than 350 locations in metro Birmingham, Alabama.
Radio. Entercom Communications Corp., one of the two largest radio broadcasters in the US, announced a definitive agreement to acquire NASH FM 94.7 in New York City, and the stations WMAS and WHLL in Springfield, Minnesota, from Cumulus Media Inc.
Exhibitions. Informa Plc, which became the world’s largest exhibitions organiser in 2018 with its £3.8bn acquisition of UBM, has begun divesting non-core operations with the $100m sale of its life sciences portfolio to MJH Associates. The New Jersey-based publisher of Pharmacy Times, Dentist’s Money Digest, and Contemporary Clinic (advised by Oaklins DeSilva + Phillips), now claims to be the largest medical media group in the US. The properties acquired from Informa include: Medical Economics and Dermatology Times; animal care titles including DVM360 and Vetted; Spectroscopy and BioPharm International; Dental Products Report; and three veterinarian conferences. The deal is one of at least three that Informa is hoping to complete in the next few weeks. As the UK-listed company prepares to report its 2018 results and success in squeezing post-acquisition cost savings from UBM, the relatively small disposals are the easy bit. Informa now has some 400 events brands, including 24 of the 250 largest exhibitions in the US. But – unlike UBM – it’s still also a large-scale business and professional publisher. That’s not a challenge – for now. But investment analysts, who had warmed to CEO Stephen Carter’s audacious exhibitions strategy, are now a bit more edgy about the evident risks in buying UBM complete with scarcely-digested major acquisitions in the US and Asia. It is just four years since one analyst described UBM’s then $1bn acquisition of Advanstar in the US as “a big and brave strategic move” and raised “questions about its quality and growth potential…”. Informa executives say they never expected to get the same kind of early performance from UBM’s portfolio as from their existing events, which is just as well because the 2018 growth rate of UBM exhibitions may have been one-third lower than those of Informa. Much of the disappointment is down to Advanstar’s largest events, for the fashion industry. Last year, Informa nervously told investors: “We’ve now had a chance to pore over…both the Advanstar acquisition and the bolt-on acquisitions that were done following… And, in round numbers, that business was targeted to do around $200m of revenue by the end of 2018, and it’s currently tracking to do about $150m.” In Las Vegas this week, Informa insiders joked about whether the $15m investment pledged by executives to their largest event, the twice-yearly Magic fashion convention, was “new” money or just “lost” profit from UBM. The early wobble underlines the risk taken by Informa in acquiring a business that had so recently narrowed down to exhibitions after decades of being across almost everything in media, consumer and B2B. That’s presumably one reason why UBM – which had been actively shedding its information and publishing businesses – still had a long tail of under-profitable events. But the warning signs were everywhere on Advanstar, a company with a patchy portfolio and a colourful history of being bought, sold and going bust. There’s no panic because Informa’s tightly-managed core business may be doing much better than investors expected – and UBM only a little bit worse. The reality means having to pedal harder to justify an exhibitions strategy which commits to:
- Global growth through ‘geo-cloning’ of exhibitions
- Embedding data services into event platforms
Those familiar objectives go to the heart of why four rival companies, each operating in more than 30 countries, are chasing Informa for global leadership in exhibitions. They all believe in the scale economies of worldwide events, especially in the developing nations of Asia, and are appetised by relatively fragmented exhibition ownership: there’s a lot of consolidation still to come. But the success of geo-cloning in any exhibitions sector frequently depends as much on the local circumstances of markets, competition and venues as on the strength of the brands. Likewise, it is not clear exactly how data will help to future-proof trade shows and, indeed, what is the potential risk of digital disruption. The Informa difference is that, for now, it’s sticking with its publishing and information businesses. It’s only the latest major company to believe that these can help to grow exhibitions. Many others (including Reed and UBM) tried but gave up publishing to became exhibition specialists. It’s easy to see why. Unlike most traditional media, the $30bn global exhibitions industry has been growing, in real, terms consistently for much of the past 15 years, even though the great fear is whether they can be digitally disrupted. Informa and its trade show rivals are variously involved in plans to build year-round buyer-visitor digital relationships. Although “online exhibitions” and webinars have mostly under-delivered, it is easy to believe that the rising cost of exhibition participation (not to mention the cost, hassle and interruption-risks to travel) may help to spawn digital solutions that capture the imagination – and at least some of the revenues – of exhibitors. But Informa’s CEO has other things on his mind. His investor presentations amplify the supposed synergies between Informa’s ‘business intelligence’ and its exhibitions. But the company which claims its £500m-revenue Taylor & Francis academic publishing “is an information business with similarities to, and cross-over with, the rest of the group in areas such as content production, data management and digital delivery” doesn’t even dare to connect that with exhibitions. It’s not unusual, of course, for CEOs to want to retain soundly profitable divisions, however peripheral they have become. But it is clear that Informa’s forecast of £3bn revenues within two years (and EBITDA margins of 32%+) will come 60% from exhibitions. The company describes itself self-consciously as being “at the heart of the Knowledge and Information Economy… one of the world’s leading B2B Events, Information Services, and Upper Level Academic Publishing businesses.” So, it’s a conglomerate. Informa’s 2017 numbers are instructive: exhibition revenues grew by 8% but everything else increased by 2% or less. While the company, which grew out of the 1998 merger of International Business Communications and Lloyd’s List, quietly fillets its B2B information group with the expected divestment of its agribusiness portfolio (reportedly to AgriBriefing) and IGM credit/FX, investors may start to question the role of academic publishing which (pre-UBM) was responsible for 30% of Informa’s revenue, 38% of operating profit and its highest margins. The £200m+ of academic profit comes from 2,700 journals and no fewer than 140,000 books, including 7,000 new editions every year. The questions keep coming with operations that are 53% dependent on subscriptions but 47% on single copy sales, and the fact that less than 30% of the books revenue is digital. The division is expected to grow by 2% in 2018 but may actually be worth some £3bn (or 40% of Informa’s current market cap) to one of the larger STM players. It may take a major new exhibitions target (the shaky Emerald Expositions in the US?), some trading squalls – or approaches from Springer Nature, Wolters Kluwer, Wiley or private equity – to persuade Informa to cash-in the academic publisher that was a £500m bargain back in 2004. Or will RELX, the STM and business-tech monolith, want to swap Taylor & Francis (and some cash) for its distinctly non-core £300m-profit Reed Exhibitions? Either way, the smart money is on Informa becoming an events-only business. A bit like UBM.
Magazines. The privately-owned Penske Media Corporation, of New York (publisher of Women’s Wear Daily, Variety, Deadline, Robb Report and almost 20 other magazine-centric brands) has purchased the remaining 49% stake in the 52-year-old Rolling Stone from Singapore-based BandLab Technologies. The deal gives it full ownership of the magazine including the international editions (formerly been managed by BandLab which had failed in 2017 to buy the 51% then acquired by Penske). BandLab, which is believed to have paid $40m for its 49% in 2016 (while Penske paid $50m for his 51%), is a digital music sharing company founded by Kuok Meng Ru. the son of a Singapore agribusiness entrepreneur who co-owns the world’s largest palm oil producer. Last year, BandLab acquired the UK magazines MusicTech and The Guitar from UK-based Anthem Publishing and Kuok is believed to be interested in buying the music magazines from TI Media (ex Time Inc UK), which include the monthly Uncut and the digital-only NME. BandLab’s service is used by millions around the world to make, share and collaborate in music. Meng Kuok also owns a Singapore-based online guitar retailer and a music merchandise company in San Francisco. After his abortive bid to acquire overall control of Rolling Stone last year, he professed to being happy to “share” the magazine and was effusive about the brand’s growth prospects: “It’s not just a media brand. It’s much more than that. It references and reflects, and also influences and sets the tone for pop culture. That gives it tremendous opportunities. It’s not a one-dimensional brand. It also has a chance to be a global brand.” That enthusiasm is why the music nut Kuok’s decision now to sell-out is such a surprise, unless something in the terms of the 2017 auction gave him little choice. On the other hand, having to cope with the competing interests of Penske and two generations of the Wenner family may just have proved too much (both founder Jan and his son Gus are directly involved despite selling their shares). Or the financials may just have become too troublesome. At Rolling Stone, Jay Penske is seen by staffers as a saviour of print for what he did at Variety, with his launch of women’s magazine Muse from the Robb Report and the expanded pagination of Rolling Stone itself, as a monthly. The 16-year-old New York-based Penske company, which claims a monthly, all-media audience of 180m, is controlled by the founder, digital entrepreneur (and sometime racing driver) who controversially last year sold a minority stake to Saudi Arabia’s Public Investment Fund. That $200m investment (for a stake of some 20%) was expected to lead to larger (and more international) deals by the highly-acquisitive Penske. Some gossip suggests that the Saudi deal may have impacted BandLab’s stewardship of Rolling Stone’s international editions. Whatever, the Saudi investment will certainly have deferred Jay Penske’s plans for an IPO anytime soon. State-sponsored killing tends to have that effect. The wildest possible scenario now is that Penske could merge his company into Conde Nast and help the Newhouse family put the sizzle back into its legendary magazine business. Instead of supporting a touted (alright, by us) merger with Hearst.
Books. The €29bn Vivendi SA has completed its €900m acquisition of Editis, the second-largest French-language publishing group from Grupo Planeta, of Spain. The French Competition Authority has approved the transaction. With a large portfolio of internationally-acclaimed authors, 4,000 new books published each year and a catalogue of more than 45,000 titles, Editis is active in the fields of fiction, children’s books, non-fiction, graphic and illustrated books, educational & reference books. the company employs 2,400 people. The Bookseller reported: The deal represents “a new brick in the construction of a major industrial group centered on media, content and communications,” Vivendi said. “It will enrich the group’s creative capacity for developing new editorial projects and types of content.” These include setting up franchises abroad on the Paddington model, and developing audio books, which are growing by 40% a year. The two companies “share a recognized know-how in intellectual property rights,” the statement added. The takeover sounds like history repeating itself, since the Vivendi group—under different ownership—controlled what became Editis before the foundations of the present group were laid in 2004. It is now made up of more than 50 publishing houses including Robert Laffont, Nathan, Bordas, Plon, Perrin, Pocket and Belfond. Leading authors include Marc Lévy, France’s bestselling novelist worldwide.
Magazines. National Enquirer publisher American Media Inc (AMI) has acquired TEN: Publishing’s Adventure Sports Network, a group of 14 action sports brands, including Bike, Powder and Surfer magazines as well as the Dew Tour event series. Terms of the deal have not been disclosed. The deal continues AMI boss David Pecker’s recent track record of diversifying (away from its dependance on scurrilous supermarket gossip weeklies) through the acquisition of media brands in trouble which last year included: US Weekly and Men’s Journal (from Wenner Media), and Bauer’s celebrity and teen magazines. The TEN magazines will augment AMI’s Active Lifestyle Group, which includes Muscle & Fitness, and Muscle & Fitness Hers. In 2016, AMI had revenues of $223m. TEN: Publishing’s parent company, The Enthusiast Network, sold a majority stake to Discovery Communications in 2017, rebranding the JV as the Motor Trend Group which plans to focus on its automotive magazines including Motor Trend, Automobile, and Hot Rod.
Exhibitions. The UK-based Mercator Media Ltd is acquiring the Marine & Coastal Civil Engineering Expo from the Prysm Group. M&CCE Expo is to co-locate with the Seawork event this year on 11-13 June in Southampton UK. Transaction terms not disclosed. The 30-year-old, privately-owned Mercator Media has a portfolio of long-established magazine-centric maritime brands including The Motorship, World Fishing, Boating Business, and Maritime Journal. The company is soundly profitable and believed to have revenues of some £6-7m. The Bristol, UK-based Prysm Group has a portfolio of some 30 B2B exhibitions including: The Business Show, Legalex, Elite Sports Performance and Farm Business Innovation.
Audio streaming. Spotify, the world’s most popular music streaming service, announced that it is to acquire Gimlet Media, the award-winning podcasting company. Gimlet was founded in 2014 and is based in Brooklyn, New York. Rumoured price is more than $200m. Spotify also acquired the podcasting app Anchor. Gimlet co-founders Alex Blumberg and Matt Lieber spoke to Peter Kafka of Recode Media just hours after the sale was officially announced. Lieber said they did consider that, given the success of its hit shows like StartUp and Reply All, Gimlet might be able to “navigate the stormy seas of media” and remain independent. But ultimately, they decided that was a risk, and Spotify had more to offer. “We looked at the path of joining a large platform with global distribution and, you know, multiple billion dollars of revenue and data and discovery and an amazing technology platform that was invested in audio,” Lieber said. “And for us, that felt like a better path where we could realize our ambitions and our goals. And also, make money back for our investors and provide a healthy return.” In 2017, Spotify’s revenue was some €4bn, up from €2.95bn in the previous year.
Magazines. Pocket Outdoor Media, best known for publishing VeloNews, has acquired Bicycle Retailer & Industry News from Emerald Expositions. As part of the transaction, Bicycle Retailer & Industry News will no longer be published by the National Bicycle Dealers Association. Transaction terms were not disclosed.
B2B information. DiscoverOrg has acquired Zoom Information, Inc to provide sales, marketing, and recruiting professionals access to comprehensive B2B data which combines DiscoverOrg’s research-verified buying insights with ZoomInfo’s coverage of business professionals. Transaction terms were not disclosed.
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